Sunday share tips: Gym Group, Concepta
Buy shares in Gym Group, said the Sunday Times' Inside the City column, as they are cheap and the company is in healthy shape. At just over 200p, stock is available for only slightly more than its initial public offer (IPO) price nine months ago, having flexed as high as 274p in the spring. The competitive situation is that Gym Group is a low-price operator with 80 sites, plus 14 more coming by the end of 2017, versus an industry of well over 6,000 gyms.
FTSE AIM All-Share
729.38
16:54 14/11/24
FTSE All-Share
4,417.25
16:54 14/11/24
FTSE Small Cap
6,809.22
16:39 14/11/24
MyHealthchecked
12.50p
16:55 14/11/24
Oil & Gas Producers
7,938.55
16:38 14/11/24
The Gym Group
165.80p
16:40 14/11/24
Travel & Leisure
8,632.62
16:38 14/11/24
But interim results this coming week are likely to confirm the company is muscling its way towards a 66% annual gain in adjusted pre-tax profits. For the first six months of the year, the offer of £16-per-month membership helped attract 23% more new members than in the first half last year. A monthly fee that is around five times cheaper than its rivals should help Gym group if there is a sustained Brexit slowdown. Although prices are cheap, the company cuts costs by keeping the joining process online and investing in other technology, and cash generation is strong, with net debt more than halved so far this year. It looks in good shape.
Concepta is a small company but worth buying, said Midas in the Mail on Sunday. It has developed a diagnostic kit that tests for women's fertility and is also a pregnancy test. Around a third of women with unexplained infertility issues have low levels of the luteinising hormone associated with ovulation, but for which Concepta's MyLotus device is the first commercially available kit. The reusable meters, which will sell for £250-350 when they go on sale, use a urine test like normal pregnancy tests but the highly accurate readings will tell users when they are most likely to become pregnant.
MyLotus has been approved by regulators in China, and are due to begin selling there this year, while UK and European approval is expected by 2018. Helping the China launch, when women log on to hospital wifi systems, they will be met with an advert for MyLotus. Manufacturing has already been arranged in China and a local distributor has been appointed, initially focusing on 20 hospitals before being rolled out further. Other products in the Concepta pipeline include those to diagnose stress, which can affect fertility and might also be applicable outside the fertility market.
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