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Alpha: Phil Oakley's weekly shares round-up

This week Phil Oakley runs the rule over WH Smith, Tristel and Bellway (plus Phil gives his view on Help to Buy)
October 19, 2018

This week I take a close look at the sales growth and profits of Aim-listed Tristel; assess the valuation of retailer WH Smith; and give my view on Bellway, including analysis of Help to Buy. 

Tristel (TSTL) is an interesting company. It manufactures high-end disinfectants based on its formulation of chlorine dioxide. The NHS is a major customer but around half of sales are now in overseas markets. With regulatory approval and Tristel's products' strong reputation acting as a barrier to entry for competitors, there are good points to this business. There are also reasons to be cautious, however, and my report outlines questions investors should ask about the company's ability to meet revenue and profit growth targets. 

WH Smith (SMWH) has followed a successful strategy for many years now but, despite the quality of its travel outlet division, there are looming questions over the future direction for its high street business. My valuation assessment looks at both businesses. 

House builders have enjoyed incredibly benign conditions over the past five years, with low interest rates stoking mortgage demand and the government's flagship Help to Buy scheme providing impetus to growth in the selling price of new homes.  My questions rest on the ability of companies like Bellway (BWY) to maintain profit growth after Help to Buy is withdrawn (the scheme is scheduled to end in 2021). 

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