Tuesday newspaper share tips: Amazon.com, Morrison, Jupiter Fund Management

Amazon.com’s entry into the UK retail food sector has led to even more frenzied competition in a UK food retail sector plagued by hard discounters, a glut of stores and a market share war online.

“Wherever money is not being made, investors can be certain of one thing, Amazon will appear and make things worse,” said the Financial Times’s Lex column.

Nonetheless, the American retailer’s move might not be completely irrational; it had gained a foothold in a new market, disrupted a smaller competitor, Ocado, and if that company’s share price fell enough then a long-rumoured buyout might yet arrive, the FT said.

It had also tilted the playing field back in Morrison’s favour, after signing on the British grocer as one of its wholesalers.

On the same day, Morrison’s said it was close to inking a new deal with Ocado on considerably better terms than the initial one; among other things it would now be free to deliver for itself in certain areas of the country.

That means that Ocado is under more pressure than ever to find a second partner, whereas for now it only appeared to have found potential new competitors despite having cash profits still hovering near zero even as revenue growth slowed.

Amazon’s indifference to profit did not mean it was totally irrational, Lex said.

Business continues to hum along nicely at Jupiter Fund Management, making for an attractive dividend yield on its shares even if this year’s payout will depend on the state of the markets, The Times’s Tempus said.

Its assets under management increased by 12% in 2015 to reach £35.7bn, which was “quite an achievement”, Tempus said.

On top of that, net inflows of new business climbed to £1.9bn and the tipster had been told assets were still in positive territory in 2016 despite the “highly turbulent conditions” in markets.

“Obviously, this year’s payout will depend on the state of the markets, but on any reasonable assumptions the shares yield about 6.3 per cent,” Tempus said.

Fund managers typically offer a decent income even as dividends elsewhere may be under threat.

“Buy for income,” Tempus said.