Portfolio

Sunday share tips: Barratt Developments, Boku

By Alexander Bueso

Date: Sunday 22 Mar 2020

Sunday share tips: Barratt Developments, Boku

(Sharecast News) - The Sunday Times's 'Inside the City column' believes that the downdraft in Barratt Developments's shares is overdone.
"As long as the disruption from coronavirus is measured in months and not years, Barratt should be as safe as houses. Buy," Liam Kelly wrote.

At one point during last Friday's trading session, the drop in its stock pushed the company's market capitalisation below its ?3.7bn net asset value, although a late rally in its shares saw them close with a market vaue of ?4.2bn.

Britain's largest homebuilder is "likely" to take a hit, said Kelly.

But he highlights an insight from broker Numis's Chris Millington, housebuiders went into the current crisis sitting on a ?3.9bn. against a ?4.8bn of debt the last time around, during the Great Financial Crisis.

"Relative to most other sectors, it should fare better," Millington had reportedly told clients.

"Housebuilders look to be in a pretty good place."

And under its current boss, David Thomas, who was its finance chief during the 2009 crisis, the homebuilder has built up a "sustainable" balance sheet.

Furthermore, no other homebuilder has kept the top customer satisfaction as long as Barratt, for over 10 years.



The Mail on Sunday's Midas column called attention to shares of Boku after fears of the coronavirus pandemic and its impact on the economy sent them back down to the level at which they floated on AIM back in 2009, at 59.0p.

Boku's technology allowed consumers the ability to pay for music, video games, movies and hundreds of apps via their phone bill.

The company was likely to benefit from the uptake in online services in the wake of the coronavirus crisis, Midas said.

To back up its case, it pointed to the firm's last trading statement, which showed a jump in business across Asia.

"The decline [in the shares] reflects neither current trading nor future prospects and the shares should bounce back in time," Midas added.

Roughly 190 mobile networks and 18m people in 65 countries already used its technology, as did online giants including Apple, Google, Spotify or Netflix.

Boku also recently snapped up US-based Danal, which helps payment processors such as Paypal to verify the identity of customers, and is moving into the so-called mobile wallet space.

"Boku only moved into this division recently but early signs are encouraging," Midas said.

"American venture capitalists, who had supported the group before flotation, took profits and some investors were concerned about the Danal acquisition, as the business was loss-making when [company boss, Jon] Prideaux bought it.

"[...] Boku shares have seesawed in recent weeks. But the current 59p price is undeserved. For investors who are prepared to buy in today's volatile market, these shares look like a bargain."



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