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Sunday share tips: Clinigen, Mitie, Warehouse REIT

Sun 04 November 2018 17:14 | A A A

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(Sharecast News) - A round-up of share tips from the Sunday newspapers, including Clinigen in the Sunday Times, Mitie in the Sunday Telegraph and Warehouse REIT in the Mail on Sunday.

AIM-listed Clinigen was tipped as a 'buy' in the Sunday Times' Inside the City column, as the distributor of commercial medicines, unlicensed medicines and medicines for use in clinical trials. The column suggests demand for the £1.2bn market cap company's services is set to "surge" in the next 10 years as patients around the world become more aware of the availability of life-saving treatments in different parts of the world. The company's overall principle is about getting "the right drug to the right patient at the right time".

Clinigen floated on the junior market in September 2012 with a valuation of £135m as it raised £50m at a price of 164p per share as it looked to grow organically and through acquisition. The company's early acquisitions included rights to therapies from the likes of Novartis and AstraZeneca, and then in 2015 it bought Idis, a rival ethical supplier of unlicensed medicines, and Southern Hemisphere focused distributor Link. Recent purchases have included Europe and US-focused packaging and logistics specialist CSM and iQone, a Swiss speciality pharma business. If Brexit causes chaos among medicine makers, "Clinigen has been extremely smart" for adding infrastructure in Europe and further afield.

Clinigen's shares are down 17% over the past 12 months, including a sharp fall after the CSM deal was announced in late September but with a bit of a rebound since. At current levels they change hands for 13 times forecast full-year earnings per share.

Mitie was put forwards as a speculative punt by Questor in the Sunday Telegraph as the shares "needs more than a quick wash and brush-up" ads the outsourcer is one of many that have taken a hit following the crisis at Carillion. The shares are down by around a quarter since annual results in early June. Chief executive Phil Bentley's 'Project Helix' transformation plan needs to apply "a bit more elbow grease" to get things back on track, Questor says, one year into the programme. "With an uptick in revenue, a normalising balance sheet, a good order book, a focused execution plan, significant investment in technology and a settled management team, I believe Mitie is well positioned for growth," Bentley said at the time.

Analysts at Barclays recently observed that cost savings in the second half of the year will finally exceed the investment that is going into the business. More good news may have been the loosening of the public sector purse strings in the Chancellor's Budget last week.

Midas in the Mail on Sunday tipped Warehouse REIT as a 'buy' as the investment company aims to reach £500m of assets over the next five years. The AIM-listed company, which floated in September last year, invests in mid-sized warehouse units located close to city centres and generally split into a number of units, generally used by larger retailers for transporting goods directly to consumers - known as last-mile delivery - while other smaller tenants use the warehouses for storage.

As of March this year it had 92 assets split into 881 units, with 652 tenants, ranging from small e-commerce firms to the likes of Amazon, Asda and Boots, giving entire portfolio a valuation of £291m. Managing the company is Tilstone Partners, run by Andrew Bird, a property expert with 25 years' experience under his belt, including at Barlows and Westbury. The Tilstone team have invested more than £17m of their own cash in the REIT on the belief that smaller, centrally located warehouses have particularly good growth potential. "Demand for space is growing, supply is limited and there are relatively few specialists in this sector," says Midas. A dividend of 6p is forecast for the current year to March and directors aim to raise the payout steadily over the next few years.

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