Proactive Investors - Run By Investors For Investors

Why Shell is a 'sell' and one of the bookmakers is a winner

Why Shell is a 'sell' and one of the bookmakers is a winner
One City broker isn't a huge fan of the oil major.

It sounds like something from the TV crime series NCIS, but the Swiss bank UBS has an operation called the Evidence Lab.

It is part of the new methodology towards research under Juan-Luis Perez, who was poached from Morgan Stanley.

Anyway, UBS’s Evidence Lab has been tracking app downloads at the Apple store as a proxy for the success, or otherwise, of the UK bookmakers. And it has identified an interesting trend.

It suggests that William Hill PLC (LON:WMH) is under intense competitive pressure, with its share of downloads receding from 22% in the first half of 2014 to just 10% in the last quarter of this year.

By contrast SkyBet is doing well (it has gone from 8% to 15%) and Ladbrokes PLC (LON:LADB) has done even better as its app market share has increased to 16% from 5% two years ago.

UBS continues to “prefer” Ladbrokes, which is says it is a ‘buy’ up to 180p, while it has William Hill on a ‘neutral’ recommendation.

The big downgrade of the morning was Canaccord’s move to ‘sell’ from ‘hold’ on Royal Dutch Shell (LON:RDSA).

The broker’s central thesis is that the oil major will struggle to generate the sort free-cash flow that is being mooted in the company’s revamped business plan.

“[The] share price is close to a 12-month high, on the rally in oil prices and weaker sterling,” Canaccord added in a note to clients.

“We share the market's concern on sterling assets, but it is harder to show what incremental triggers there are from here.”

Canaccord’s analysts were also active in the media sector, where they upgraded Lloyd’s List owner Informa PLC (LON:INF) to ‘buy’ from ‘hold’ with a 720p price target.

Credit Suisse, meanwhile, remains lukewarm on the prospect for Vedanta Resources PLC (LON:VED) – even after an upgrade to stock in the miner. It went to ‘neutral’ from ‘underperform’.

The Swiss bank is a fan of the packaging group Mondi Plc (LON:MONI) and rates the shares ‘outperform’. It has increased the price target to £20.25 from £18.80.

Citigroup repeated its sell on the mining giant Anglo American PLC (LON:AAL) and 830p a share price target.


Register here to be notified of future RDS.A Company articles

No investment advice: The Company is a publisher and is not registered with or authorised by the Financial Services Authority (FSA). You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter. You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate. From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

© Proactive Investors 2019

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use