Sunday share tips: IG Group, Likewise

(Sharecast News) - The Sunday Times's Lucy Tobin recommended shares of IG Group to readers, pointing out that the valuation was near historical lows.

She also noted how the spread-better stood to benefit from economic and market volatility.

In her opinion, part of the reason behind the decline in the firm's valuation was the $1bn takeover of US online brokerage Tastytrade.

Yet Tastytrade's revenues had jumped significantly during the last quarter.

Other strong points included its high operating margins, strong cash generation, and positive exposure to higher interest rates.

"Yet the valuation remains near historical lows - adding one final reason for IG looking especially interesting right now: the cut-price shares and solid balance sheet mean it's a realistic takeover target," she said.

"Interest from the US could well emerge, but in the meantime, IG is worth a bet on its own. Buy."

Likewise shares are a 'buy and hold' investment, the Financial Mail on Sunday's Midas column said.

The flooring distributor's shares were trading just beneath their 2021 IPO price of 25.0p despite having more than doubled sales over the preceding year.

Its boss, Tony Brewer, was also expected to sound a confident note on the outlook for 2023 when the company announces its results on Tuesday.

Investors had been spooked by the possible impact of economic pressures on the business and consumer outlays.

"Brewer has a stated goal of increasing sales to £200 million in the next few years by creating a robust and efficient business and taking market share from other operators.

"Progress has been encouraging but the pace should accelerate in the next few years as recent investments bear fruit."

But Midas said that reaction appeared to be overdone.

Midas also highlighted Brewer's more than four decades of experience in the sector and successful track record.

"As a 12 per cent shareholder, he is financially motivated too."