MIDAS SHARE TIPS: Revitalise your numbers with data gurus, ships and scientists

What a sorry start to 2023. The UK is either in recession or heading that way, stock markets look pretty cheerless and many investors are worried about what the coming months will bring.

Yet, even now, there are grounds for optimism. Inflation should come down through the year, economic conditions will improve and, perhaps most importantly, dynamic business leaders will continue to press ahead, determined to deliver growth and reward investors.

Midas tips for 2023 centre on three such businesses, drawn from very different sectors, but united in their focus on strong, sustainable success.

GlobalData

Mike Danson founded his first research business, DataMonitor, in 1992 when he was just 29. He floated it in 2000 at £120million and sold it seven years later for more than £500million.

Many would have hung up their hat there and then. But Danson soon started buying up-and-coming data analytics businesses and in 2016 pulled them all under one roof to create GlobalData.

The company is now valued on the stock market at almost £1.5billion. But the share price has fallen by around 30 per cent since the summer of 2020, to £11.75. That seems unjust. GlobalData is a robust, resilient business and the stock should gain ground as Danson continues to deliver growth.

The company provides in-depth information on industries including consumer goods, oil and gas, technology and agriculture. Whereas DataMonitor specialised in printed reports, GlobalData’s research is all online. It is updated continuously and spans both detailed analysis and news on specific sectors.

The group has around 5,000 business customers, including multinational groups such as Unilever, Coca-Cola and Pfizer, as well as hundreds of smaller firms across the world.

Each account costs around £20,000 a year but many companies have numerous accounts with some paying up to £1million annually for GlobalData’s services. In an uncertain world, information is increasingly valued and firms use Danson’s group to find out as much as they can about issues such as trends, new product launches, drug trials, mergers and acquisitions.

The research they receive is high quality so renewal rates run at 90 per cent or more per annum and several firms take out multi-year contracts. That means Danson already has a good idea of what 2023 will bring – and it is looking encouraging.

GlobalData’s year-end was yesterday and a trading update is scheduled this month. Ahead of that, brokers expect 2022 revenues of £235.6million, with profits up 19 per cent to £62million and a 25 per cent hike in the dividend to 24.2p. For 2023, revenues of £266million are forecast, alongside profits of £77million and a payout of 27.6p.

Danson, born and bred in Wigan, Greater Manchester, owns 62 per cent of GlobalData, so his net worth runs into hundreds of millions of pounds. But he is a classic entrepreneur, always determined to make this business bigger and better.

Midas verdict: GlobalData shares have been marked down amid fears that tough economic conditions will affect growth. But the business and its predecessors have proved resilient in previous downturns and information is more prized today than ever. At £11.75, GlobalData is well worth a buy. The company is growing fast, paying dividends and led by a proven winner.

Traded on: AIM Ticker: DATA Contact: globaldata.com or 020 7936 6400

HVivo

Testing new drugs is expensive, time-consuming and fraught with logistical challenges.

First, new remedies need to be safe. Then firms need to prove that they work. This is often done by giving them to volunteers, sending them away and hoping some of them will contract the illness their medicine is supposed to treat. Trials can involve thousands of people and take years, particularly when testing for seasonal illnesses, such as flu.

HVivo pursues a different path. The company recruits healthy volunteers and injects them with the drug it is trialling. Recruits are kept in quarantine for two or three weeks and monitored throughout to see if the treatment works.

Undervalued: Drugs tester hVIvo is a leader in the race for new vaccines 

Volunteers are compensated for their time and spend the quarantine period in an hVivo treatment centre, which is like a smart hotel with medical facilities on tap.

These so-called ‘human challenge’ trials tend to be cheaper and faster than traditional methods. Pfizer, for example, used an hVivo human challenge trial as part of its research into the infection RSV, a flu-like virus that is one of the leading causes of death among the under-twos. 

Pfizer hopes to gain approval for a new RSV vaccine this year, a move which is likely to save thousands of young lives.

HVivo also conducted the first human challenge trial for Covid-19 in 2021, sending the shares to more than 40p. Today, they are just 10p, with investors taking the view that hVivo is ‘a Covid stock’.

Yet the group conducts multiple trials each year, revenues are growing fast and there is a strong pipeline for 2023 and beyond.

Midas verdict: HVivo is a recognised leader in its field and also runs FluCamp, a popular programme in East London that trials new flu vaccines. At 10p, the shares are undervalued. Buy.

Traded on: AIM Ticker: HVO Contact: hvivo.com or 020 7756 1300

Harland & Wolff

On March 31, 1909, work began on the Titanic, a vessel that took three years to build, employing 3,000 men. The company behind that mammoth project was Harland & Wolff, which went on to become one of the most prominent ship- builders in the world.

In 2018, however, the group fell into administration. At the time, people said shipbuilding was as good as dead in Belfast.

John Wood, a proud Scot who started his career in the merchant navy, is determined to prove them wrong.

As chief executive of a listed business, Infrastratra, Wood bought Harland & Wolff from the administrators and set about trying to create a company worthy of its past. The group now has facilities in Appledore, Devon, Arnish and Methil in Scotland and Islandmagee in County Antrim, as well as the iconic Belfast site.

The firm covers everything from design and development to construction, repair and maintenance. It is also involved in several sectors – defence, energy, cruise and ferries, commercial vessels and renewables, such as barges for offshore wind turbines.

A number of key contracts have been won recently. In Belfast, Cunard cruise liner the Queen Victoria, was given a makeover last summer, the largest cruise ship ever to undergo such work in the UK.

The firm is rebuilding an ex-Royal Navy minehunter, HMS Quorn, for the Lithuanian Navy. And, along-side two partners, it is preferred bidder for a massive £1.6 billion Ministry of Defence contract to build support ships for the Navy.

Other contracts are expected, too, as the Government seeks to expand the UK’s fleet, as part of a national shipbuilding strategy.

Yet Harland & Wolff shares have tumbled over three years, not least on Friday, when it announced that several projects would now be delivering revenues in 2023 rather than the year just ended.

Midas verdict: Harland & Wolff is a venerable name with a history stretching back to the 1860s. The Titanic sank, but this company has come back from collapse and should ride the waves once more. At 16p, the shares could deliver handsome rewards to the adventurous investor.

Traded on: AIM Ticker: HARL Contact: harIand-wolff.com or 0330 124 0427