Sunday share tips: Astrazeneca, Galliford Try, Grainger

Buy shares in Astrazeneca said Questor in the Sunday Telegraph. The London-listed company is one of the foremost developers of cancer treatments in the world, especially in the exciting new field of immuno-oncology, which use the body’s own immune system to recognise and destroy cancer cells. Analysts believe two of Astrazeneca's treatments, one for ovarian cancer and one for lung cancer could see their sales double from 2017 to about $7bn, or a quarter of total sales.

The company's 'patent cliff', where patents run out and doctors start using rival cheaper drugs instead, is believed to have past its worst fall and analysts believe revenues will start rising again in 2016, with Berenberg estimating profit margins can recover steadily from 2016 to 2023 to the sector average of about 35% and earnings can grow at 13% a year in the same period. As the shares have drifted to a 12-month low after the possible takeover from US rival Pfizer has gone away, they are now trading on 15 times forecast earnings and offer a 4.4% prospective dividend yield. The stock markets is likely to soon price in such analyst optimism.

Sell shares in Galliford Try, says Danny Fortson in the Sunday Times' Inside the City column. Measures to give a fresh jolt to the housebuilding sector are likely to be included in this week's budget, with shares of the likes of Galliford Try predicted to get a bump. Galliford Try, which operates under the Linden Homes brand, is expected to produce £109m in pre-tax profit this year, up 14% from last year’s £85m and its shares yield a tidy 4.9%.

Galliford's trading statement this coming week, on the same day as the budget, will likely remain bullish. However, there are reasons to be cautious, including a premium valuation, a cooling housing market and the looming departure of chief executive Greg Fitzgerald after a decade at the helm.

Hold on to shares in Grainger, argued Midas in the Mail on Sunday. The property company's shares have done well this year, but are still undervalued and many think the company has been run too conservatively in the past. The appearance of activist investor Crystal Amber Fund as a 3 per cent shareholder, saying it believed Grainger could be worth a lot more if it ran the business more aggressively, and the appointment of new chief executive Helen Gordon should combine to galvanise the stock. With dynamic new chairwoman, Baroness Ford, appointed in March, the conservative strategy of the past could be about to change, with even the chance of takeover action. A firm hold.

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