Prime Housing Falls

Headlines say non-doms’ retreat hits London’s prime housing market and all stock picks are a mix of 77% BUY, 11% HOLD and 12% SELL.

1. OVERWEIGHT Capita

Top performing stock pick this week is OVERWEIGHT Capita by Barclays with a tip performance of 8%.

Capita share price launched at 184p in 1993, rose to an all-time high of 12,074p in 2015 and is today at 289p.

On 17th June the embattled outsourced service provider issued its trading update for five months ended May in this RNS.

Positive regarding ‘long-term transformation’ and margin improvement but concerning regarding short-term revenue and cash flow, the update raises some caution.

Nevertheless, Barclays have rated it OVERWEIGHT. Other news in the trading update:

• adjusted revenue was down ~8% year-on-year, primarily due to exiting certain service lines and lingering headwinds
• expecting a free cash outflow of £120m–£140m in 2024, with additional restructuring costs impacting H1 2025
• staff attrition is around 21% which is extremely high for any sector
• increased its cost savings target from £160m to up to £250m by December 2025, driven by operational efficiencies and the use of AI and generative AI
• margin progression with adjusted operating profit margin up by approximately 50 basis points
• focus on transforming the operating model and exiting lower-margin service lines may improve competitiveness and profitability
• the Board remains confident in achieving a 6–8% operating margin in the medium term.

In Stockomendation Deutsche Bank says BUY, RBC Capital has OUTPERFORM and Barclays says OVERWEIGHT. Five open fund manager short positions, view those here.

2. AVOID The Mission Group

Second top performing stock pick this week is AVOID The Mission Group by Steve Moore in ShareProphets with a tip performance of 4%.

The mission Group a UK-based marketing communications company that operates as a collective of agencies.

The Mission Group share price launched at 126p in 2006, rose to its all time high of 150p in 2007 and is today at 26p.

On 16th June The Mission Group held its AGM, the update can be found here. Steve Moore questions the positive narative portraying steady performance, strategic progress and financial prudence. Despite reported revenue growth and client wins suggesting business momentum, the lack of financial specifics contained – or rather not contained – in the update, leaves Steve wondering about the reality of the situation.

In Stockomendation two analysts: Canaccord Genuity (the company’s financial advisor and broker) with BUY and Moore with AVOID. No active short positions.

3. BUY Diploma

Third top performing stock pick this week is BUY Diploma by Investec with a tip performance of 3%.

Diploma is a distributor, operating in the three sectors of Controls including specialised wiring, Seals including seals and gaskets and Life Sciences including consumables and instrumentation.

Diploma has operations in North America, Europe, Australia, New Zealand, New Caledonia, and China. Founded in 1931. It was first listed on the London Stock Exchange in 1960, and was a market leader in electronic component distribution, building products and special steels until the late 1980s.

Diploma share price was at 102p in 1993 and is today at 4,779p, its all-time high.

In Stockomendation five analysts: Kepler Chevreux, Investec and Berenberg with BUY; Harvey Jones with WATCH and Barclays with OVERWEIGHT. There are no active short positions.

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Disclaimer: The contents of this article should not be considered financial advice. Pricing data correct as at 20th June 2025.