Expert share tips: Tesco, BT & more

Tesco, BT and Card Factory are among the stocks hitting the headlines this week.

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

1. Card Factory - BUY

Symbol: CARD.L

Index: FTSE 250

Card Factory (Image: Google Finance)

An upbeat trading update has put the focus on Card Factory, which boasts exceptionally stable cash flows.

Jonathan Pritchard, an analyst with stockbroker Peel Hunt, believes the shares are cheap and says the only “fly in the ointment” is finance director Darren Bryant stepping down.

“It remains clear to us that the greetings card industry is extremely stable and Card Factory has an enviable position within it,” he said.

“The competition will, undoubtedly in our minds, continue to close stores and this will only aid the like-for-like momentum.”

Invest from just £50 a month with Fidelity's Stocks & Share ISA

2. Tesco - HOLD

Symbol: TSCO.L

Index: FTSE 100

Tesco (Image: Google Finance)

Tesco shocked the market on Friday morning by announcing a £3.7 billion deal to merge with Booker Group, the UK’s biggest food wholesaler.

The addition of Booker, which owns the Londis, Budgens, Premier and Family Shopper brands, will add around £3 billion to Tesco’s £15.5 billion market capitalisation.

Ian Forrest, analyst at stockbroker The Share Centre, said the shares are currently rated ‘hold’ due to sector competition, but pointed out the merger news was still being digested.

“You can see it’s good for Tesco as the shares rose 10% on the news,” he said.

“It gives them access to the eating out market as Booker provides supplies an awful lot of restaurants and catering groups.”

Invest from just £50 a month with Fidelity's Stocks & Share ISA

3. BT - BUY

Symbol: BT.A

Index: FTSE 100

BT (Image: Google Finance)

It’s been a tough week for the telecoms giant with concerns over the deepening accounting scandal at its Italian business causing shares to fall 20%.

Ian Forrest at The Share Centre, believes the drop was excessive and points out that the company’s consumer business was doing well.

“The cash generation is very strong and the company sounds confident of being able to meet dividend increases, so that should give investors confidence,” he said.

“We have raised rating to ‘higher risk’ and recommend it more for investors wanting income.”

Earn tax-free returns with these top Stocks & Shares ISAs

4. Hostelworld - BUY

Symbol: HSW.L

Index: FTSE SmallCap

Hostelworld (Image: Google Finance)

A leading global hostel-booking platform, the business has had a good year.

It delivered 21% growth in bookings for its flagship Hostelworld brand in the second half of 2016, resulting in 18% growth for the year as a whole.

Analyst Wyn Ellis of Numis Securities said: “Disrupted travel patterns made for a challenging year in 2016 but, in our view, HSW management negotiated a tricky period well.

“Cash flow conversion remains strong and with a cash-rich balance sheet.”

Invest from just £50 a month with Fidelity's Stocks & Share ISA

5. Countryside Properties – BUY

Symbol: CSP.L

Index: FTSE 250

Countryside Properties (Image: Google Finance)

The UK homebuilder gave an encouraging trading update and said some weakness at the top end of the market was being more than compensated for by strong performance at lower price points.

Peel Hunt analyst Gavin Jago said he was very happy with a buy recommendation.

“Trading in Q1 has been strong with 23% growth in completions, while a marked increase in outlets and a record forward order book leaves the group very well placed to meet the medium-term targets set out at the IPO last year,” he said.

Earn tax-free returns with these top Stocks & Shares ISAs