STOCKS TO WATCH: Trainline is set to steam ahead on the Continent; Wizz Air’s cash burn
Shares in ticketing app Trainline were derailed by the long-awaited Williams-Shapps review, which recommended setting up a Government-owned rival.
The stock lost £500million in value on the day and has fallen a further 10 per cent since, as Trainline bosses plot their next move. Investors and analysts think a change of track to expand Trainline’s overseas arm faster could offer a handy hedge.
Trainline offers services direct to consumers and also runs websites for rail operators in 45 European countries.
Analysts think a change of track to expand Trainline’s overseas arm faster could offer a handy hedge after the company was derailed by plans to create a a Government-owned rival
The division has struggled in the pandemic but the reopening of borders should help, eventually.
Panmure Gordon travel analyst Alex Chatterton says investors may have overlooked the value of the overseas arm, which ‘could be a big growth driver’ as state-owned rail in Europe is liberalised.
He reckons marketing spend overseas will rise, adding: ‘That would be a good area to invest in. With the shares where they are now it could help improve the stock’s trajectory.’
Wizz Air’s share price chart resembles an Alpine ski range as investors buy and sell the Hungarian airline’s stock with each sign of Covid’s impact on travel.
This week’s results won’t look pretty for the London-listed budget carrier, and the key question will be how much cash its operations are eating up.
The bulk of its flights are to eastern Europe, which has not been the quickest to roll out Covid vaccines, though travel restrictions there have not been as tight as in the UK.
Bosses remain bullish with plans to expand in the Middle East but the chequered pandemic picture and rising fuel costs leave lots of clouds on the horizon.
Bloomsbury is a surprise pandemic winner, with frets over the closure of bookshops giving way to Britons rekindling a love of reading in lockdown.
The Harry Potter publisher posts results this week and momentum is strong after two profit upgrades this year.
Bestsellers such as Sarah J Maas’s latest fantasy, A Court Of Silver Flames, have helped, while a tome on outdoor cooking by TV chef Tom Kerridge and a new novel by America’s Lisa Taddeo look promising.
Analysts at Peel Hunt are looking for hints on where its ‘cash mountain’ might be spent, if it is not returned to investors.
Could more acquisitions be in the offing after the recent deal for assets from Macmillan’s academic imprint Red Globe?
Investors looking for clues about share price movements are often told to keep an eye out for bosses buying or selling their own company stock.
Last week, I wrote about a recent sale of nearly £2million of shares by Prudential chief executive Mike Wells, along with share sales by Mark FitzPatrick and chief risk officer James Turner.
The sales were in fact to pay the tax and fees due on shares awarded under the Pru’s 2018 bonus plan, and weren’t a reflection of the management’s opinions on Prudential’s share price. After speaking to the Pru, I’m happy to make this clear.