Sunday share tips: hVivo and On the Beach

Under chief executive Mo Khan, hVivo has had a "storming 2023", according to Midas after full-year results from the company beat expectations this week.

Meanwhile, 2024 should be even better, it said, on the back of £17m testing contract and the opening a state-of-the-art quarantine facility in Canary Wharf next year to enable more trials.

The shares closed Friday at 23p, up 97% since the start of January.

"A trading update in January should bring fresh cheer to investors and brokers expect strong and sustained growth in sales and profits. Khan even paid a special 0.45p dividend earlier this year – more of the same may be on the cards," Midas said.

"hVivo has delivered handsomely for shareholders and some may wish to bank profit at 22p. But there is plenty more in store from this stock next year and beyond. Supportive investors should stick with Khan and his team."

The Sunday Times recommends taking a look at On The Beach, the Manchester-based online package-holiday business. The stock is up 14% for 2023 and now trades at just over 170p, but the paper sees further upside.

The paper pointed out that despite this year's share-price rise, On The Beach is still trading 50% lower than the 500-600p level seen before the pandemic.

What's more, the stock trades at nine times forward earnings, compared with the five-year average of 20 times, despite the expected return of the dividend next year following a pandemic-imposed pause. The company is also cash generative and now debt-free with cash reserves above £75m, the paper said.

"Investors’ worries about a heavy marketing spend to build the brand in the luxury travel market have also been allayed: marketing costs fell from an elevated 45% to 38% of core UK revenues," The Sunday Times said.

The paper pointed to further "decent expansion opportunities" and comments from Shore Capital which suggested that a 220p share price would be fair value.