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STOCKS TO WATCH: De La Rue, SSE and Prudential


STOCKS TO WATCH: Will Covid certificates be a licence to print money for De La Rue?

With long lunches back on the menu for deal- makers last week, the City rumour mill spun into action.

Amid a flurry of take-overs, one historic firm in the bankers’ sights is De La Rue, founded in 1813.

The money-printer, which makes notes for the Bank of England, has looked vulnerable to a hostile bid since its stock disintegrated after losing out on the blue passport contract in 2018.

City sources claim foreign trade buyers have shown an interest.

Its boss Clive Vacher – a former police sergeant and turnaround specialist – has focused on cutting costs including closing operations in Gateshead and expanding further into polymer notes.

Sources say it has also developed digital and physical Covid certificates and is in talks with several governments about deploying them, although this is not key to the firm’s revival.

Results this week should show profits hitting a healthy £37 million. Any signs of improvement on that could put buyers on high alert.

Shares in Prudential fell this month as its demerger with US business Jackson Life was delayed. 

Chief executive Mike Wells did little to restore faith in the stock, offloading nearly £2 million of shares in a planned sale. 

Numbers man Mark Fitzpatrick and chief risk officer James Turner, offloaded £900,000 and £170,000 of shares respectively. Tidy sums for the men from the Pru.

Schroder Global Recovery Fund manager Simon Adler calls the pandemic the ‘most fertile hunting ground for a decade’ in the markets.

His fund specialises in buying stocks that managers believe are basically sound over five years, but are suffering a blip. 

The fund took a hit early in the pandemic, but form has been decent of late, and it has increased the number of stocks it holds to reflect the Covid carnage.

Adler’s major stakes include NatWest, Royal Mail and British Gas owner Centrica.

There are plenty of international plays too. Adler plumped for stock in Genting Singapore, the tourist attraction on a man-made island which has low debts and should snap back… in theory.

Brave betting.

This week’s results from SSE should help investors focus on the future of the energy market as this year’s COP26 climate conference hoves into view.

SSE shed its retail customer base to Ovo for £500 million last year and its share price has been surprisingly sprightly since then.

The power firm is spending £7.5 billion to treble its output from renewable energy by 2030.

The company is behind what it hopes will be the world’s largest offshore wind farm, at Dogger Bank off the Yorkshire coast. It also hopes to build wind farms on the Continent, and in the US and Japan.

A gust of news on any of these projects will be welcome.

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