Sunday share tips: Clipper Logistics, Wynnstay
The surge in retail spending online in the wake of the pandemic has driven a roaring trade for Clipper Logistics, but the firm will need to continue delivering, said the Sunday Times's Sabah Meddings.
The company, which operates 50 warehouses and 500 lorries, posted a 19.8% jump in sales to £305.2m for the six months ending on 31 October.
Clipper's offers various services to the likes of H&M, John Lewis and Marks&Spencer, including everything from storing stock to packaging goods and handling returns.
Combined with a government contract to distribute personal protection equipment and thanks to rumours of a potential interest from private equity, its shares had nearly tripled since March, before retreating to 556.0p, Meddings pointed out in her 'Inside the City' column.
More recently nevertheless, its executive chairman, Steven Parkin, reduced his stake in the firm from 25.1% to 13.9%.
In 2019 Parkin had studied a possible bid for his creation with the aim of taking it private, an idea that he had since shelved.
"Clipper faces challenges. Growth in e-commerce and home deliveries is likely to slow, perhaps even reverse, as consumers venture back to shops. This could expose the sharp fall in international parcel volumes after Brexit, which has so far been hidden by domestic online shopping," she said.
"Clipper will need to continue to deliver. For now, this is one to hold."
The Financial Mail on Sunday's Midas column recommended readers 'buy' share of Wynnstay, arguing that the stock had become, like that of so many British companies since the Brexit vote, "very cheap".
Yet as sure as spring follows winter with clarity over Brexit, goods crop harvests and soaring demand for British meat, "the mood is considerably brighter".
Significantly, trade deals were now also being negotiated with countries beyond Europe, the tipster added.
The farming supplies business could also count on approximately 25,000 clients worldwide and many more consumers were purchasing British produce.
Farmers were also moving to invest so that they could thrive in the post-Brexit environment.
"Wynnstay joined AIM in 2003, since when it has delivered 17 years of uninterrupted dividend payments. That record should continue. At £4.50, the shares are a buy."