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Sunday share tips: Golden Prospect Precious Metals, IntegraFin

Sun 01 March 2020 19:49 | A A A

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No news or research item is a personal recommendation to deal. Hargreaves Lansdown may not share ShareCast's (powered by Digital Look) views.

(Sharecast News) - In an increasingly uncertain world where recession fears are growing, trade tensions persist and economic growth in developed countries remains low, picking up some assets linked to gold makes sense, said the Mail on Sunday's Midas column.

They can do so by buying it outright, purchasing gold-backed exchange traded trusts - passive funds that invest in physical gold - or buying individual shares of miners.

But there is another option, investing in investment trusts that own stock in multiple miners.

One of the best of those, Midas said, is Golden Prospect Precious Metals, due to the experience of its managers and the rigor of their investment strategy, which includes extensive research and meetings with companies' management teams.

"For many investors, buying shares in junior miners is fraught with danger. Companies promise the world, run into difficulties and often run out of cash, the tipster said.

The trust's managers focus on smaller companies given that they tend to be undervalued, sifting through hundreds of companies each year to find those with robust balance sheets and a good growth outlook.

But few companies make the grade with the trust holding 55 names but concentrated in 25.

There is also some silver mining in the portfolio, as well as palladium and a tiny bit of zinc, and the companies selected from multiple geographies, providing diversification.

"At 28.9p, Golden Prospect's shares reflect neither its current value or future prospects," Midas said.

"Investing in junior miners is never risk free so this stock is not for the most cautious investor but for those looking for a different way to access gold, these shares are a buy."

Emma Dunkley at The Sunday Times told readers to 'buy' IntegraFin, the fund supermarket for financial advisers.

The shares, she pointed out, had stormed ahead even as the likes of Hargreaves Lansdown grappled with the fallout from the suspension and then liquidation of Neil Woodford's Equity Income fund.

Since listing two years back at 196.0p, in a flotation that valued it at €650.0m, the company's market worth had jumped to roughly €1.6bn.

The logic behind the firm's business model is that advisers also prefer to use one place to invest for their clients, instead of shopping around among a raft of different fund managers.

Its founder, Mike Howard, who stepped down as boss in October 2017, was still the largest shareholder, with a 9% stake, and still ran IntegraDev, which supplies IntegraFin's technology needs.

Other top shareholders included America's Blackrock, Investec Asset Management and Liontrust.

Integrafin has 5,900 advisers on its platform who serve 180,000 customers holding €39bn in assets.

In 2019, it turned an operating profit of €48.6m, a fifth more than during the prior year, on the back of €99m in sales.

According to various analysts in the City, financial market turbulence sparked by the coronavirus pose a headwind for IntegraFin and its rivals, as do cheap passive index-tracking funds, but a huge amount of money was set to migrate from old-fashioned pension products to self-invested personal pension funds and Isas.

"With people living longer and looking to save for retirement, the need for investment products is rising. Now might be a good time to snap up the stock. Buy."

    The value of investments can go down in value as well as up, so you could get back less than you invest. It is therefore important that you understand the risks and commitments. This website is not personal advice based on your circumstances. So you can make informed decisions for yourself we aim to provide you with the best information, best service and best prices. If you are unsure about the suitability of an investment please contact us for advice.