Expert share tips January 2017: Vodafone, HSBC, RBS & more

Here’s your round up of what the experts are tipping this week.

1. Royal Bank of Scotland - Sell

Shares may have recovered after plunging to 148.9p last summer but the business still has plenty of problems to solve. This means it’s a ‘sell’ as far as The Share Centre is concerned.

“There are a lot of legacy issues, the recovery hasn’t been as quick as people were hoping and there is still a long way to go,” said research analyst Ian Forrest.

A major negative is the absence of a dividend.

“Until we see the Government’s stake being paid down significantly, the resumption of dividends and some progress with restructuring, it’s going to be tough for them,” he added.

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2. Halfords - Hold

Share tips January 2017 (Image: Shutterstock)

The high street retailer of car and cycle goods cheered the stock market last week by announcing strong sales growth.

For Peel Hunt the stock is a ‘hold’.

“Trading is very strong (although not as far ahead of management expectations as it is above market hopes) and the special dividend (10p) allays concerns that investors would never see the strong cash flow generation,” wrote analyst Jonathan Pritchard.

“The question now is whether this is a high watermark for the company, aided by favourable weather conditions, or if there are genuine signs of fundamental change here,” he added.

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3. Abzena – Buy

The life sciences company has signed a licensing deal with an undisclosed San Diego-based biopharma company for its ThioBridge drug linker technology, which links antibodies to drugs.

Numis Securities is among those that have the stock rated as a ‘buy’. “The deal has the potential to reach over $300m in licence fees and milestone payments to Abzena,” wrote analyst Stefan Hamill.

The company is regarded as having a potentially strong future.

“We see Abzena as the key UK play on the ongoing explosion in demand for biopharmaceuticals development and manufacturing services as hundreds of biological drug candidates progress through development,” he added.

4. Vodafone - Buy

Share tips January 2017 (Image: Shutterstock)

It is one of the world’s largest mobile phone groups and is attractive to income investors, according to Ian Forrest of The Share Centre, who currently rates the stock as a ‘buy’.

"The yield is well above average and very appealing, particularly with inflation likely to go up,’ he said. ‘Competition in the UK is still very tough and we’re still waiting to see if it’s going to make an acquisition to improve its position."

The strong demand for data has been helpful. "You have 4G – and potentially 5G as well – so there are a lot of positives," he added.

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5. Moneysupermarket.com - Buy

The FTSE 250 company is a well-known price comparison website that enjoyed a great final quarter of 2016 with insurance growth of 30%. Even more significant was travel returning to a positive like-for-like of +21%.

Peel Hunt reiterates it as a ‘buy’.

"In our view this performance introduces upgrade momentum for 2017 and beyond," said analyst Malcolm Morgan.

"Though silent on the issue of a special dividend, we are firmly of a view this will be proposed by the boards. The new CEO joins on 13 March."