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Sunday share tips: Sensyne Health, ConvaTec, US Solar Fund

Sun 10 March 2019 15:49 | A A A

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(Sharecast News) - Newspaper share tips from the Sunday Times, Sunday Telegraph and Mail on Sunday on Sensyne Health, ConvaTec and US Solar Fund.

AIM-listed Sensyne Health is tipped as a long-term investment in the Sunday Times' Inside the City column. Led by former science minister Paul Drayson and in a unique partnership with various NHS trusts, the company offers drug companies "ethically sourced, anonymised patient data", with the NHS getting a share of any royalties. The company also has developed various health-related apps.

The data is the key and Sensyne, which is valued at £244m and has just under £58m after its IPO last summer, adds value by looking for patterns. "There is no single database," said David Cox, an analyst at Panmure Gordon. "This creates significant barriers to entry." Analysts estimate the company will lose an underlying £12m as it generates little more than £200,000 this year. Sales should jump when future pharma partnerships are signed and there could be milestone payments when drugs are given regulatory approval and reach the market. "That could be 10 years away," the column says, but noting that US health data peer Flatiron Health was taken over for almost $2bn.

The Sunday Telegraph's Questor advises selling and moving on from medical devices group ConvaTec, which after being the biggest IPO of 2016 has seen its shares lose a third of their value since, despite an initial climb. The maker of colostomy bags, catheters and complicated wound dressings spun off from Bristol-Myers Squibb, led by a "stellar board" led by ex Vodafone man Christopher Gent, has stumbled over its margin improvement programme, disrupted production and the search for a new chief executive after the "hapless" Paul Moraviec left last autumn.

For investors wondering whether to hold on for recovery, Questor concludes it probably not worth it, even though the shares are on a discount to peers on a forward p/e ratio of 13 times. "Even though the current management have injected a healthy dose of realism into the story, it's time to stomach the loss and move on."

Midas in the Mail on Sunday tips US Solar Fund as an "attractive investment", despite President Trump's antipathy to the sector. "At an individual state level however, attitudes are very different," Midas notes as all states either have clean energy targets or are interested in renewable power. Solar power is of particular interest as it is now one the cheapest sources of power available.

US Solar Fund expects to list on the London Stock Exchange next week, with shares priced at $1 or 76p each, with the fund aiming to drum up $250m and planning to borrow an equal amount from banks to create an initial investment warchest. Management are targeting a 5.5% dividend yield from 2020, rising steadily in subsequent years.

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