Sunday share tips: Persimmon, Evraz, Taylor Wimpey, Barratt Developments

The Mail on Sunday's Joanne Hart said that while the Bank of England may have raised its official borrowing rate to 0.75% in August, savings rates remained "painfully low", with savers struggling to earn much more than 1% interest a year.

Compare that with the income from Midas' "Dogs of the Footsie" portfolio, based on a strategy developed by US market guru, Michael O'Higgins, which comprises the ten highest-yielding shares in the FTSE 100 index, with its average annual income of more than 8% and a couple of stocks – housebuilder Persimmon and steel producer Evraz – delivering yields above 9%.

Hart said that extraordinarily high yields normally mean one of three things: the shares are undervalued on the stock market, the shares are heading for a fall or brokers believe that future dividends will be cut.

While Hart noted that for many years, Midas' adaptation of that strategy worked well, she said this year, the picture was "more complicated". with share prices remaining stagnant despite seeing dividends soar.

In February, the portfolio comprised energy groups Centrica and SSE, housebuilders Taylor Wimpey and Barratt Developments, insurers, Direct Line and Admiral Group, tobacco firm Imperial Brands, Lloyds Banking Group, Marks & Spencer and BT.

However, four of those "Dogs" are no longer in the portfolio – Admiral, Lloyds, M&S and BT. They have been replaced by housebuilder Persimmon, phone group Vodafone, investment firm Standard Life Aberdeen and Russian coal and steel producer Evraz.

The reshuffle leaves the portfolio with three housebuilders, yielding between 7.9% and 9.6%.

Hart warned that as Housebuilders' fortunes wax and wane with economic cycles, Midas' three Dogs were unlikely to be immune if the economy slows and the housing market continues to stall. For now, however, she said Barratt, Taylor Wimpey and Persimmon all offered "eye-catchingly generous" yields.

Of the others, Hart said Standard Life Aberdeen was added after its shares fell heavily, noting that as stock prices fall, dividend yields tend to rise.

Hart also noted that Evraz was "in a happier position" after seeing coal, steel and vanadium production and prices rebound this year, pushing profits and dividends up.

Over at the Sunday Times, Sabah Meddings said gene-sequencing "unicorn" Oxford Nanopore's chief executive Gordon Sanghera announced that his loss-making biotech firm had opted to list on the Hong Kong stock exchange over the tech-heavy Nasdaq for a joint listing with London, and the way Meddings sees it, if successful, the dual listing could represent "a huge win" for Britain's life sciences industry.

Meddings said the deal would also be "a blessing" for IP Group, the FTSE 250 scientific innovation backer that co-founded Oxford Nanopore, and investors such as fund manager Neil Woodford.

However, Meddings said that with the likes of Woodford staking their reputations on the firm's success and with IP Group shares desperately in need of a boost, fears that Oxford Nanopore will fail to live up to its hype were taking hold.

Orders for the company's machines were on track to triple in 2018, but Meddings noted that it "remains to be seen" whether Oxford Nanopore can become a rival to market leader Illumina.

Andy Smith, an analyst at Edison Investment Research, said the company had "significant challenges" over accuracy, adding that Oxford Nanopore's $165,000 machines were still not as accurate as Illumina's.

"You wouldn’t want to make a clinical decision based on a higher error rate," Smith said.

Woodford Patient Capital Trust, which regularly invests with Lansdowne Partners and Invesco, has been praised by healthcare companies after its successes with cancer-therapy developer Autolus, which floated on the Nasdaq with a $150m valuation in June.

However, Meddings noted that the close relationship between the investors and the companies they back had led many to ask whether or not there was a conflict of interest, noting that Woodford, a long-time supporter of IP Group, holds a near-20% stake in the firm and also separately invests in many of it's offshoots, including Oxford Nanopore.

Meddings highlighted the fact that the risk of basing most of its value on one company had not escaped IP Group shareholders, but also noted that after the group added Touchstone Innovations to its portfolio after an aggressive takeover last year, paying entirely in shares IP Group's reliance on Oxford Nanopore had been reduced from 40.1% to just under 20%.