Loan Defaults: More to Come

Headlines say banks are preparing for more loan defaults and all Stockomendation tips this week are 86% BUY, 7% SELL and 6% HOLD.

1. SELL Videndum

Top stock pick this week was SELL Videndum by Shore Capital with a tip performance of 15%.

Videndum, a provider of hardware and software solutions for content, has three main areas of focus: Media Solutions, Production Solutions, and Creative Solutions. Back in 1993, Videndum was listed at 380p, and over the course of 20 years, its share price has nearly tripled in value, reaching 940p.

This "SELL" recommendation was a change of direction for Shore Capital, as they had previously rated it as a "BUY" since 2022.

In terms of analyst ratings, there's conflicting information. While Berenberg rates it as a "BUY," Shore Capital suggests a "SELL." As of now, there are no active short positions on Videndum according to Stockomendation, the platform that tracks such data.

2. AVOID GB Group

This week's second top share pick this week was AVOID GB Group by Steve Moore in ShareProphets with a tip performance of 5%.

GB Group specializes in identity validation and fraud detection services for major global companies. It boasts an impressive clientele of some of the largest corporations worldwide. After debuting at 220p in 1993, its stock price reached a record high of 930p in 2021. However, it has unfortunately declined to 326p, though still an improvement from its rock-bottom of 9p in 2002.

The major news impacting GB Group's stock price this week was a profit warning. Steve Moore is cautious about the optimistic statements made by the company's board, and he has consistently advised against buying this stock. Interestingly, according to Stockomendation, the platform that aggregates analyst ratings, out of five analysts, GB Group has received four different ratings: Jefferies and Peel Hunt suggest "HOLD," Barclays recommends "OVERWEIGHT," Numis rates it as "BUY" – and then there's Steve's "AVOID." Currently, there are four active short positions on GB Group, and JP Morgan recently made a significant increase in their position.

3. BUY Petra Diamonds

Third top stock pick this week was BUY Petra Diamonds by Peel Hunt with a tip performance of 5%.

Petra Diamonds, a mine owner and operator based in Jersey, has three mines in South Africa and one in Tanzania.

AStarting at 2,634p during its listing in 1998, Petra Diamonds' share price soared to an impressive high of 8,409p in 2014, only to gradually decline to a less impressive 80p. However, there's been a setback; in the first half of 2023, Petra Diamonds reported a net loss of $17.6 million, which is a stark contrast to the $49.1 million profit for the same period the previous year.

Despite this, the board remains positive and predicts higher production both in the short term (1 year) and long term (5 years).

Among four analysts on Stockomendation, Peel Hunt now rates it as "BUY," Bank of America considers it "NEUTRAL," Barclays rates it as "EQUAL WEIGHT," and Berenberg suggests a "BUY." As of now, there are no active short positions on Petra Diamonds.

Image credit: Petra Diamonds

Forewarned is forearmed! As always you can see the the aggregated, performance monitored and ranked stock tips and picks data in Stockomendation.

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Disclaimer: The contents of this article should not be considered financial advice. Pricing data correct as at 23rd February 2023.