A dirt-cheap bargain?

Royal Mail (LSE: RMG) shares have fallen by more than 30% over the last year. This slump has left the shares trading on six times forecast profits, with a prospective dividend yield of 6.8%.

Admittedly, profits are expected to fall this year as the boost from the pandemic fades. Rising fuel and labour costs are also a potential concern.

Even so, brokers’ consensus estimates suggest that Royal Mail will generate £349m of surplus cash in the 2022/23 financial year, rising to £412m in 2023/24.

My sums suggest that the near-7% dividend yield should be comfortably covered by Royal Mail’s cash generation, reducing the risk of a cut. An added attraction is Royal Mail’s large property portfolio. This business has plenty of asset backing, in addition to its trading profits.

I think Royal Mail looks like a classic value stock at current levels. I may add the shares to my portfolio in the coming weeks.

Energy market opportunity

My next pick is energy services firm Wood Group (LSE: WG). This business started out as a North Sea oil services provider, but offers a much broader range of energy operations today.

Unfortunately, the group’s diversification has coincided with a difficult period for energy markets. Debt has remained stubbornly high in recent years and profits have been disappointing.

Wood Group’s share price has dropped 15% over the last year and is 70% lower than five years ago. However, I think we’ve seen the bottom.

Wood is now selling its infrastructure business, which always looked like a mis-matched acquisition to me. At the same time, I expect the group’s core energy business to be enjoying improved demand, due to higher oil prices, plus continued growth in renewable projects.

Wood Group’s turnaround has taken a lot longer than expected. It’s not over yet. But this business is expected to return to profit in 2022 and could resume dividend payments in 2023.

Right now, I think Wood Group could be one of the best value opportunities in the energy sector.

An overlooked value stock

Chemicals group Synthomer (LSE: SYNT) has its heritage in the Malaysian rubber industry. Today, it produces a wide range of polymer-based products. These include latex gloves, foam for consumer goods, adhesives, and chemicals used by industrial customers.

The last three years have been a rollercoaster for shareholders. The shares rose from a low of 205p in March 2020 to 550p in 2021, as demand for latex gloves boomed during the pandemic.

Market conditions are now returning to normal and Synthomer shares have dropped back to around 300p.

One risk I can see is that slowing economic growth could have a knock-on effect on demand. With the boost from the pandemic gone, profits could disappoint.

However, I think that the share price already provides a fair margin of safety. Based on broker forecasts, Synthomer shares trade on less than eight times forecast earnings, with a dividend yield of 5.4%.

Synthomer could be the next stock I buy for my portfolio.

And as market sentiment improves, I believe investors may reevaluate their prospects and send valuations higher. With that in mind, here are two dirt-cheap UK shares I’d buy today. 

UK shares to buy

The first company on my list is the specialist property real estate investment trust (REIT) Capital & Regional (LSE: CAL). This organisation owns shopping centres around the UK. 

The pandemic has decimated this sector, and Capital hasn’t been able to escape the pain. For its 2020 financial year, the company reported a loss of £200m, nearly 2.5 times its current market capitalisation. 

Property writedowns, as well as lower levels of rent collection, have all hurt the group. However, things are starting to look up. Occupancy across the company’s portfolio was nearly 90% at the end of May.

Moreover, 99% of leased units were open and trading across the group’s seven shopping centres towards the end of June. On top of this, the firm has agreed 38 new lettings and renewals this year. 

These are all positive developments. Still, this business isn’t out of the woods yet. There’s been a structural shift over the past 24 months away from brick-and-mortar stores towards online retail. This is likely to have a lasting impact on the group’s property portfolio. Revenues may never recover to pre-pandemic levels. 

Nevertheless, right now, the stock is selling at a price-to-book (P/B) value of around 0.5. I think this looks dirt-cheap. So, while the stock might have its risks, I’d buy the firm as part of my basket of UK shares. 

Stormy waters

Another company I’d buy for my portfolio of dirt-cheap UK shares is John Wood (LSE: WG). This oil and gas services business has been battered by volatile oil prices recently. Its subsidiary, Amec Foster Wheeler Energy Limited, has also had to deal with an investigation from the UK Serious Fraud Office. This investigation recently ended with a £103m deferred prosecution agreement. 

With the investigation out of the way, and the outlook for the oil and gas industry looking up, John Wood can now focus on growth. 

And as the group moves on, investors can snap up the share for a bargain price. The stock is selling at a P/B value of 0.5 and a forward price-to-earnings (P/E) multiple of 10.2. 

I’d buy the stock for my portfolio of UK shares based on these metrics. However, I should reiterate that this firm’s outlook is tied to that of the oil and gas sector. This sector can be highly cyclical, and so can John Wood’s earnings. As such, the company’s growth is far from guaranteed. 

Allergy Therapeutics — which produces treatments for people with allergies and immunity disorders — said that operating profit was “strong” during the 12 months to April. And as a consequence it reckons that its bottom-line performance will be “well ahead of market expectations.”

The UK healthcare share said that trading had remained strong despite challenging conditions, with sales helped by a favourable euro exchange rate too. As well, Allergy Therapeutics said that expenses for fiscal 2021 would be lower than predicted. This is due to some commercial projects being pushed back into this year and Covid-19 travel restrictions hitting conference attendances.

For the current financial year Allergic Therapeutics expects net sales “to grow at low single digit levels at constant rates”. The company said that it intends to improve the quality of its product portfolio “by streamlining a number of non-differentiated older products and maintaining focus on short course subcutaneous immunotherapy (SCIT) and innovative allergy treatments.” It predicted that the ongoing coronavirus crisis will impact sales this year too.

Finally the UK share advised that expenses “are expected to increase above the historic long-term trend and above current market expectations.” This is due to those commercial projects being delayed into financial 2022, while higher research and development activity will also hit operating margins.

A sinking UK share

The John Wood Group (LSE: WG) share price hasn’t fared nearly as well as that of Allergy Therapeutics on Thursday. Indeed, the oilfield services provider has slumped 9% during the course of Thursday business.

FTSE 250 firm Wood Group has now moved to its cheapest since last November. It has almost lost all gains printed during the past 12 months, too. The UK engineering share said that like-for-like revenues fell to $3.2bn in the first half. This represents a 21% annual fall and was caused by the ongoing Covid-19 crisis. As a consequence adjusted EBITDA is tipped to fall to between $255m and $265m, down around 12% on a like-for-like basis from the first six months of 2020.

In better news Wood Group said that it had witnessed improving activity momentum during the second quarter. It added that its Consulting and Operations divisions had both moved back into growth between April and June. These units are collectively responsible for 60% of group turnover.

These improved performances helped the group’s order book improve to $6.9bn as of the end of May. This was up around 6% from December levels.

Wood Group expects trading activity to remain lower year-on-year over the course of 2020. But it anticipates a “stronger” performance during the second half. The UK share expects to return to growth versus the first half of the year and the final six months of 2020.

However, I reckon there are still some good opportunities out there. Today, I’m going to look at two companies that have caught my eye recently.

From oil to renewables

I think it’s fair to say renewable energy is a sector that’s going grow for the foreseeable future. But the reality is that much of our energy today still comes from oil and gas.

I reckon that one good way to play the energy transition is to invest in companies whose services are needed by oil producers and renewable operators, especially offshore. My favourite stock in this sector is  Wood Group (LSE: WG), which has been in business for more than 100 years.

Wood Group has historically focused on the oil sector, but the company has diversified in recent years and now works in renewables and the wider infrastructure sector. I reckon that should support longer-term growth.

In the meantime, the company is still an important service provider to the oil sector — including the growing area of North Sea decommissioning.

What could go wrong? Market conditions are pretty tough for oil services firms these days. Wood’s profit margins have never returned to the peak levels seen from 2013-2015, when oil traded at over $100 per barrel.

The company is also still battling to repay the debt it built up when it acquired AMEC Foster Wheeler in 2017. Borrowings are coming down, but they’re still a little high for my liking.

Despite these concerns, I think Wood Group looks decent value at the moment, on around 13 times 2022 forecast earnings. I’d be happy to buy the shares at this level, as I expect to see steady growth over the next few years.

This UK share could keep growing

One company that’s impressed me over many years is FTSE 250 firm Spirent Communications (LSE: SPT). This company is one of the leading players in the network-testing and analytics sector. Its main business is providing the services and equipment needed by network operators to test services such as 5G and Wi-Fi.

The pandemic caused some extra challenges last year. Despite these, Spirent’s adjusted pre-tax profit rose by 10% to $104m last year, while its operating margin rose to 18%.

City analysts are forecasting a 17% increase in pre-tax profit for 2021. Is this the perfect business? Not quite.

Spirent must continually invest in research and development to ensure that it has the best testing solutions for new technology. The company is spending about 20% of its revenue on R&D each year at the moment and must continue to stay ahead of new trends. Falling behind could result in a multi-year slump in new sales.

This UK share isn’t cheap either. Spirent trades on around 23 times forecast earnings for 2021, with a dividend yield of just 1.6%. If steady growth continues, then I think this valuation is probably fair. But if results disappoint, then I think the stock could fall sharply.

Despite these risks, I’d buy Spirent Communications today. I reckon it’s a good quality business in a growing market. In my experience, that combination often makes for a good investment.

And who doesn’t want to find shares that have the potential to double their money? I suspect it’s the goal of many people. And the beginning of 2021 could prove to be a great starting point for many new portfolio investments.

Some things could help businesses to thrive in the year ahead. For example, the UK’s free trade agreement with the EU frames the ongoing trading relationship between the two entities. And, despite the recent flare-up of the pandemic, there’s been great progress in the fight against Covid-19. Like many people, I’m optimistic the start of the countrywide vaccination programme will prove to be a decisive blow in the battle against the virus.

So, I’m enthusiastic about my share picks for this year. And I reckon the following two stocks have great potential for the next 12 months and beyond.

2 of my best shares to buy now

The FTSE 250’s John Wood (LSE: WG) provides “consulting, projects and operations solutions” in the energy and built environment industries. As such, the business experienced declining earnings over the past few years driven by the downturn in the oil sector.

But City analysts predict double-digit percentage growth in earnings this year following a similar uplift in 2020. And the recovery in the oil industry is helping the progress along with the company’s strategic plan to focus operations on “differentiated, higher-margin business”. There was an example of the plan in action in November when the company announced the completion of the sale of its joint venture interest in TransCanada Turbines for a cash sum of $67m.

I reckon the firm’s portfolio optimisation programme could combine with general economic recovery in 2021 to propel the shares higher. With the stock near 323p, the forward-looking earnings multiple for 2021 is just below 16.

Meanwhile, Wynnstay (LSE: WYN) is a smaller business with a market capitalisation just below £70m. But despite its size, the agricultural supplies company has a stable trading record and has been good at raising shareholder dividends incrementally over the past few years. With the share price near 344p, the forward-looking yield is just above 4.3% for the trading year to October 2021.

This one could be a Brexit winner

City analysts expect steady single-digit advances in annual earnings ahead. But the valuation is undemanding with the earnings multiple for next year running near 10. And the shares were as high as 650p in the spring of 2017. Back then, Wynnstay was posting double-digit percentage annual increases in earnings. So, it seems the stock has re-rated down to reflect the current growth rate.

I reckon the pandemic is making life difficult for the business right now. But Wynnstay’s position as “an essential supplier to the farming community” means it’s well placed to serve what could be a growing industry in Brexit Britain. It wouldn’t surprise me to see the outlook improve and the valuation re-rate back up as 2021 unfolds.

All three firms look like decent long-term buys to me.

I’ve been buying

One stock I’ve been buying myself over the last couple of weeks is payment handling firm PayPoint (LSE: PAY). This £580m group operates a network of nearly 28,000 payment terminals in convenience stores around the UK.

These provide card handling services and allow customers to make and receive cash payments for bills and other transactions. They also support the Collect+ parcel drop-off network.

PayPoint’s growth has been limited in recent years by the ongoing switch from cash to card payments. But the firm has the largest network of its kind in the UK and is diversifying to support future growth.

In the meantime, this business remains highly profitable, with an operating profit margin of more than 40%. A policy of returning surplus cash means the stock offers a dividend yield of nearly 10%. I expect this yield to fall somewhat over the next few years, but continue to see the shares as an excellent income buy.

A turning point?

It’s been a tough few years for Wood Group (LSE: WG), the Aberdeen-based energy servicing company.

The group’s reputation was built on providing offshore services for oil rigs in the North Sea. It’s more diversified these days and now provides a wide range of engineering services for the energy sector, including renewables.

However, market conditions have been tough in recent years. Major clients in the oil and gas industry have been keeping a tight lid on spending. And digesting the 2017 acquisition of rival AmecFoster Wheeler has turned out to be more difficult than expected.

Despite these concerns, I believe Wood Group may be nearing a turning point. Management has agreed two disposals recently which should help to reduce debt and refocus the group on its core operations. Earnings are expected to rise by nearly 15% this year, as profits return to growth.

These forecasts price the shares on just 8.5 times 2020 earnings, with a dividend yield of 7.8%. I reckon the shares are worth buying at this level.

The ultimate contrarian play?

Life’s not easy for fund managers at the moment. Their fees are generally calculated based on the value of the assets they manage. So when markets fall, so do profits. Active managers such as Jupiter Fund Management (LSE: JUP) must also compete with the increasing popularity of cheaper passive funds.

Jupiter’s pre-tax profit fell by 16% to £151m last year, following the departure of a top fund manager. The group’s dividend was held at 17.1p, but no special dividend was paid, reducing the total shareholder return.

However, chief executive Andrew Formica is beefing up the group’s operations through a merger with rival Merian Global Investors. This is expected to deliver big cost savings and diversify the group’s fund portfolio so that it’s not so heavily dependent on a few star performers.

Jupiter remains very profitable and generated a return on equity of almost 20% in 2019. The shares trade on just 11 times 2020 forecast earnings, with an expected yield of 7.5%. At this level, I rate Jupiter as an income buy.

Short-sellers have been circling since Cineworld’s shares flopped by over 50% in February 2018, after it announced the acquisition of its US rival, Regal Entertainment. The US is a mature market and thought to be at risk from the proliferation of streaming services, and the big, expensive deal irked investors when smaller, yet growing markets could have been entered on the cheap.

The release of full-year 2018 results (which included the results of Regal Entertainment) plumped up the share price from March to May of 2019 but prices again declined after the company announced it was selling some US cinemas and leasing them back.

Investors probably saw this as an admission that a king’s ransom was paid for those Regal revenues, particularly as some of the cash was earmarked for reducing company debt, and were unimpressed with a special dividend being paid with the rest. Looking back at the full-year results their attention may have then been drawn to the contractions in both gross and operating margins, the 17 times increase in net financing expense, and the increase in the ratio of total liabilities to total equity from 0.58 to 1.53. Revenues have grown, but costs have increased and the balance sheet is weaker.

Since August, notifications of big institutional investors selling their holdings in Cineworld have been coming in droves. The share price has hit a new five-year low in the last few weeks, and the net short position against its shares stands at 12.02% going into December.

Not out of the woods yet

Making it’s third consecutive monthly top three most shorted shares appearance is Wood Group (LSE: WG), which is a provider of equipment and services to the oil, gas, and coal industry. Equipment and service providers to the oil & gas industry have had to slash prices to win contracts as producers seek to lower their costs in light of lower oil prices.

Annual profits for Wood Group have fallen from over $300m in 2014 to losses in 2017 and 2018. The company is now trying to cut its own costs – a profit was made for the first six months of 2019 – and reduce its reliance on the fossil fuel industry, despite the sale of its nuclear business (to deleverage the balance sheet) seemingly countering this message.

Dividends have been increasing despite dividend cover being negative in 2017 and 2018. Investors will be fearing a cut, which would hurt the share price, and expectations of a cut help explain why there is a net short position of 9.24% on the stock going into December. 

Betting against the house

Gambling stocks in general took a hit in November when limits and restrictions for online gambling in the UK were suggested. Flutter Entertainment was not hit as hard as other gambling companies, perhaps because it gets relatively more revenue outside the UK and could point to strong growth in the US.

Flutter’s UK revenues are, however, still at risk, and the US is still loss-making, yet its share price has risen. Flutter is a new entry in the top three with a net short position of 9.06% going into December; short-sellers are betting its share price will fall.

Fat profits

PayPoint (LSE: PAY) is one of the most profitable businesses in the FTSE 250. For its 2019 financial year, the group reported an operating profit margin of 26%, compared to the market median of 7.6%. This healthy margin means the company is swimming in cash. Indeed, at the end of its last financial year, the firm reported net cash on the balance sheet of £38m.

I don’t expect this trend to come to an end anytime soon as PayPoint is one of the largest payment processors in the UK. The company manages transactions for clients and then skims a small percentage off each deal. It’s a highly scalable business model and, as PayPoint’s profit margins indicate, profitable.

As the country continues to transition away from a cash-based economy towards electronic payments, demand for PayPoint’s services should only increase. Its business model is the primary reason why I think its shares can help you generate a second income. The other reason is management has adopted a policy of returning as much free cash as possible to shareholders.

For its current 2020 financial year, City analysts believe the company will distribute a total of 83p per share to investors, giving a dividend yield of 9.5% on the current share price. Current City estimates indicate a yield of 8.8% for 2021 as well.

However, despite this market-beating dividend yield, the stock still trades at a relatively attractive forward P/E of just 13.4. In my opinion, this undemanding undervalues the business and its cash generation.

Transition phase

The other FTSE 250 dividend stock I think has the potential to give you a second income is oil and gas services group John Wood (LSE: WG). Shares in this business have been a poor investment since the beginning of 2017, with the stock price having fallen by more than 60% since January of that year.

It’s easy to see why investors have been selling their interests in the company, as net income has consistently declined every year since 2014. But it looks as if things are about to change.

Last year, John Wood acquired peer Amec Foster Wheeler, which nearly doubled group revenues. However, 2018 was somewhat of a transition year, and the benefits of the acquisition didn’t shine through.

The City thinks this will change in 2019. Analysts have pencilled in a net profit of $326m for the year, up 78% from last year. On top of this, they’re forecasting a per share dividend payout of $0.36, giving a yield of 8.3% on the current share price.

It looks as if John Wood is well on the way to meeting these forecasts. Pre-tax profit increased by 25% in the first half, which means the company is on track to hit full-year targets according to management.

All in all, if you’re looking for an undervalued industry giant that has the potential to provide you with a second income, I’d consider John Wood today.

The former has lost 95% of its value in just 18 months due to a major accounting error, savers rushing to withdraw their cash and a poorly received (and subsequently pulled) bond issue. To say that the challenger bank finds itself challenged is putting it lightly.

Kier’s recent performance is equally shocking. Over the last 12 months, the share price has fallen 86% for many of the same reasons: an emergency cash call, an accounting error, and a profit warning. Restructuring costs remain a drag and Brexit continues to cast a shadow over the property, residential, construction and services firm.

With things looking so bleak, it’s natural that some should try to find a way of profiting. As I type, both Metro and Kier rank among the most shorted stocks on the London Stock Exchange. In other words, investors are making sizeable bets that the share prices of both are likely to fall further. 

Regardless of what you feel about the ethics of short-selling, it can be very lucrative. Many of those that wagered against market casualties like Carillion and Debenhams made a lot of cash in the process. That’s not to say it isn’t high-risk — losses are technically infinite if they get their calls wrong and share prices rise.

There is, however, another business that’s more hated than either Metro and Kier. 

The silver medal goes to…

With 9.7% of its stock currently being shorted, FTSE 250 member and oil services provider Wood Group (LSE: WG) ranks second in the leaderboard and above both Kier and Metro. Worryingly, the only company with more short positions hanging over it is Thomas Cook. 

At first glance, this all seems a bit harsh, especially when you take the company’s recent interim results into account. Back in August, the Aberdeen-based business revealed a $13m profit over the first six months of 2019 compared to a $52m loss over the same period last year (despite logging a 2.6% decline in revenue to $4.8bn). Wood also maintained its outlook for the full year and stated that it was “well-positioned for growth across the energy and built environment markets” beyond this.

Unfortunately, the market just doesn’t seem interested, with the fall in Wood’s share price over the last year showing no signs of abating just yet. Arguably the biggest concern is the amount of debt the company still carries.  

Net debt stood at $1.77bn by the end of June, 14% higher than at the same point last year. And while the sale of its nuclear business for $305m is expected to reduce leverage once the deal is completed in Q1 2020,  it would appear some also have concerns about Wood’s limited exposure to the recovering offshore and liquid natural gas markets compared to rivals.

A price-to-earnings (P/E) ratio of just over eight might look cheap, but there’s certainly an argument for saying that even this valuation might come under review if the health of the global economy were to deteriorate. At 8.3%, the yield is one of the highest in the FTSE 250 but dividends are, somewhat ominously, barely growing.

The shorters have been wrong in the past — Ocado being a perfect example. Could they have got Wood Group wrong as well?

With the shares at 3,026p, British American Tobacco (LSE: BATS) trades on a forward-looking earnings multiple below nine for 2020, and the anticipated dividend yield is near 7.5%.

BATS looks like it’s out of favour with investors to me. But City analysts expect a rising dividend ahead. And in August’s half-year report, the directors said the firm is on track to achieve around 40% revenue growth per year from new categories of product, which looks set to more than offset ongoing declines from cigarette volumes.

I think the valuation is ripe for an upwards readjustment, perhaps through September and beyond. 

Kevin Godbold does not own shares in British American Tobacco.

Tom Rodgers: Greencoat UK Wind

Greencoat UK Wind (LSE: UKW) invests in and owns 35 UK wind farms, concentrated onshore in England and Scotland.

Its 25% debt-to-assets ratio is low considering the FTSE 250 firm spends hundreds of millions on buyouts, and there is huge potential here. The UK government is now committed to net zero emissions by 2050 and wind makes up 17% of the renewables market. 

UKW shares are also backed by a 4.8% dividend yield, covered 1.7x by earnings. Shareholder returns have also outperformed all its market rivals since 2013. I think it’s a cracking buy.

Tom Rodgers owns shares in Greencoat UK Wind.

Manika Premsingh: Just Eat

FTSE 100 share Just Eat (LSE: JE) saw a sharp spike in its share price in late July following a merger announcement with  Takeaway.com, which will make it the a largest food delivery service in the world. With this as the backdrop, it sounds contrarian to buy the shares now, but it’s worth noting that the price has since dipped in line with the broader Footsie decline. It’s now trading at 15% below its highest level in five years.

I reckon that as equity markets stabilise and investor confidence returns, this company will see a sharper run up in price than other FTSE 100 ones, given the growth potential now available to it. It might be best to buy it now.

Manika Premsingh has no position in Just Eat.

Karl Loomes: AstraZeneca

Suffering a setback to its Imfinzi lung cancer treatment towards the end of August, I believe the underlying fundamentals of AstraZeneca (LSE: AZN) still make it a strong investment.

Unlike many competitors, Astra has been showing a proven business model, particularly in China, to offset losses associated with generic drugs after patents run out. The result has been strong growth in the region and – combined with its drug portfolio – global sales, revenue and profits have all been climbing as a result. The share price is certainly not its cheapest, but I think we will be looking back at this level in a year’s time as a point when we should have bought.

Karl owns shares of AstraZeneca

Rupert Hargreaves: Future 

According to City estimates, profits at magazine publisher Future (LSE: FUTR) will surge more than 200% in 2019. This makes the firm one of the fastest-growing businesses in the FTSE 250, which is why I’m recommending it as my top stock for September. 

Based on current growth estimates, the stock is trading at a forward P/E of 26 – that’s hardly expensive considering the company’s projected growth. Earnings are set to jump another 12% next year, indicating a 2020 P/E of 23.

I’m excited to see what the future holds for this business as the company builds on its growth going forward. As Future was losing money until 2016, it does not offer much in the way of a dividend at present, but with profits set to surge during the next two years, that could be about to change…

Rupert Hargreaves has no position in Future.

Royston Wild: Highland Gold Mining

August’s proved to be a special month for Shanta Gold. It’s a share which I previously tipped because of an improving price outlook for the yellow metal, and I’m pleased to say that (as I type) the company’s value has risen around 20% since the turn of the month.

A worsening macroeconomic landscape means that there’s plenty more scope for bullion to gain ground, too, so why not play this trend through Highland Gold Mining (LSE: HGM), another top mining play?

The possibility of more metal price gains isn’t the only reason to buy Highland for September, though. Interims are slated for the 3rd and I’m excited to see what the company has to say for itself as production levels steadily improve and costs come down.

Oh, and right now Highland trades on an undemanding forward P/E ratio of 12.5 times, giving it ample space to rise in the coming weeks.

Royston Wild does not own shares in Highland Gold Mining or Shanta Gold.

Edward Sheldon: Legal & General Group

My top stock for September is financial services company Legal & General Group (LSE: LGEN).

After a strong start to the year, Legal & General shares have fallen over the last month as volatility has returned to equity markets. This has pushed the stock’s forward-looking P/E ratio down to around seven, while the dividend yield has risen to nearly 8%.

With the group delivering a solid set of half-year results in August, in which earnings per share were up 13% and the interim dividend was lifted 7%, I think the recent share price weakness has created an attractive buying opportunity for long-term investors.  

Edward Sheldon owns shares in Legal & General Group 

Ambrose O’Callaghan: Fresnillo

My top stock for September is Fresnillo (LSE: FRES). The spot price of silver has generated huge momentum in the month of August. This comes months after it had stagnated in gold’s shadow as investors have fled to safe havens.

Fresnillo is the top silver producer in the world, which makes it a highly attractive target in this environment. The stock was still down 26% year-over-year as of close on August 27, and shares were close to technically oversold territory. Fresnillo has room to run with the spot price of silver surging in the face of global economic anxiety.

September will be a big month in the lead up to the Brexit deadline, and Fresnillo offers nice value and exposure to silver.

Ambrose O’Callaghan has no position in Fresnillo.

Paul Summers: Unilever

September will likely be a pretty volatile month for markets. Regardless of whether a Brexit deal is agreed or not, I think most investors should be gravitating toward large stocks that don’t depend solely on the UK economy for their profits. 

My pick for next month is, therefore, Unilever (LSE: ULVR). As one of our biggest listed companies with exposure to markets all around the world, the Marmite-maker has the clout to survive whatever happens post-Halloween…

At 22 times forecast earnings, I suspect the current valuation reflects Unilever’s quality more than anything else. In contrast to some firms in the FTSE 100, the near-3% yield also looks secure.

Paul Summers has no position in Unilever

Kirsteen Mackay: John Wood Group

When John Wood Group (LSE: WG) acquired Amec in 2017 for £2.2bn, its debt level didn’t sit well with investors and the share price now sits close to its 52-week low.

Last week Wood Group announced it sold its nuclear business to Jacobs for £250m. This news was welcomed by shareholders as it helps bring the debt to a more manageable level.

The company reported a pre-tax profit of $62.2m for the first six months of 2019 from a $25.3m loss in the same period in 2018.

Management believes the group remains well positioned for growth. It has a price-to-earnings ratio of 45.9p and earnings per share of 8.5p. Its dividend yield is 7%. I think this share price will rise very soon.

Kirsteen Mackay owns no share mentioned.

Fiona Leake: Just Eat

Just Eat (LSE: JE) shares have sky-rocketed 25% at the end of July thanks to the huge share merger with Takeaway.com. Many have described the soon to be combined company as a huge “European powerhouse”. It certainly is very easy to see why, as the two companies combined received 360m orders worth €7.3bn in 2018.

Furthermore, Just Eat has already seen a 21% rise in orders during the first half of this year. On top of this, revenue has also risen by 30%. I truly believe that September could be the time to invest as I think that the share price will only continue to rise. I would be very interested in what further success this merger could bring.

Fiona Leake does not own shares in Just Eat.

G A Chester: Smiths Group

I’m seeing exciting prospects at several companies that are planning to unlock value for investors by a sale or demerger of part of their business. Smiths Group (LSE: SMIN), a FTSE 100 industrial technologies conglomerate, is one such company.

It intends to demerge its medical division in the first half of 2020. I’m making it my top ‘buy’ this month, because its annual results are due on 20 September, and I think these could be a catalyst for rising investor interest in the stock. Management turned down a bid for the division last year that I reckon values the group at around 50% higher than its current market valuation.

G A Chester has no position in Smiths Group.

Roland Head: Go-Ahead Group

Bus and train operator Go-Ahead Group (LSE: GOG) has seen its share price rise by about 30% over the last year. Investors have been encouraged by strong trading and a return to profit growth, after a difficult couple of years.

The company is due to publish its full-year results in early September. I expect a strong set of figures, as June’s trading update confirmed revenue growth throughout the business.

Although Go-Ahead shares aren’t as cheap as they were, a price tag of 12 times forecast earnings still looks reasonable to me. I believe further gains are possible. In the meantime, the 4.8% yield provides a useful income.

Roland Head owns shares of Go-Ahead Group.

Stepan Lavrouk: Shaftesbury

When it comes to real estate, I have a simple rule – do not bet against property markets in centres of first-tier cities. It is for this reason that I am very positive on Shaftesbury (LSE: SHB).

This West End-focused REIT has a history of both outperforming its market and of dividend increases. Although it currently yields just 2%, I believe that management could make good on its track record and continue to increase its payouts. I also believe that its quality real estate portfolio will prove to be resilient even in the case of a no-deal Brexit, especially compared to the wider market.

Stepan Lavrouk does not own shares in Shaftesbury.

Peter Stephens: British Land Company

With Brexit contributing to weak investor sentiment towards commercial property stock British Land (LSE: BLND), there could be a buying opportunity on offer for long-term investors. The REIT currently trades on a P/B ratio of 0.5, which suggests that it has a wide margin of safety.

Of course, the company faces an uncertain future due to an ongoing shift towards online retailing. In response, it is pivoting towards flexible office space and build to rent opportunities that are set to mitigate the impact of a retail slowdown on its wider portfolio.

With a dividend yield of over 6%, British Land could offer good value for money and income investing appeal.

Peter Stephens owns shares in British Land.