Sunday share tips: Foresight Sustainable Forestry Company, IWG

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(Sharecast News) – The Financial Mail on Sunday’s Midas column tipped Foresight Sustainable Forestry Company to readers.

The aim of the company, which was set to float on the London Stock Exchange later in November, is to provide investors with annual returns of at least 5.0% more than inflation.

Foresight Sustainable Forestry already had a portfolio of 27,000 acres of which about 70% was forested and with the remained set to be converted to woodland over coming years.

Because only 13% of the UK is forested, against over 45% on the Continent, UK timber prices have been rising at an anual clip of almost 6%.

Key to the investment thesis, wood is “far more” environmentally friendly than steel or cement and the company plans to generate sales from the beginning by selling timber, even as it plants new trees.

The company’s managers, Robert Guest and Richard Kelly, have also already identified a further 1.2m acres of land in Scotland, Wales and Northern England which are ideal for new forests.

Half of that land would be dedicated to mature forests with the remainder being filled by commercial trees like pine and fir, as well as ancient native species such as whitebeam and holm oak.

Furthermore, the pastureland purchased for conversion into forests will gain in value as planning permission is secured, alongside the carbon credits that Foresight will gain and that it can then sell to businesses.

“Speaking at COP26, Boris Johnson described trees as ‘the lungs of our planet’. Foresight Sustainable Forestry Company intends to help those lungs to breathe more easily and deliver annual growth of more than 5 per cent to shareholders,” said Midas.

“For investors in search of alternative, eco-friendly assets, the shares, at £1 apiece, could be just the ticket.”

The Sunday Times’s Sabah Meddings recommended readers ‘buy’ stock in IWG, the provider of shared offices.

Above all, she called attention to the fact that occupancy at the offices that IWG had before Covid was now above 70%.

Yet its share price remained more than 30% below its pre-Covid level.

It was also trading at a discount to sector peer WeWork, with its shares changing hands on a price-to-sales ratio of 1.59, against near 2.5 for WeWork.

For Meddings, the company’s strength lay in the longer-term shift towards flexible offices as businesses look to reduce costs.

IWG has also branched into franchising as part of its shift towards a more capital-light expansion.

“Further lockdowns would dampen its prospects, but at this price it looks undervalued,” she said.

“Buy.”