Purplebricks isn’t the only Neil Woodford share I’d sell today

Royston Wild explains why Purplebricks Group plc (LON: PURP) isn’t the sole Woodford-held share that he’d sell immediately.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Neil Woodford favourite Purplebricks Group (LSE: PURP) was back in the headlines this week with fresh news on its global expansion programme.

Expanding its existing footprint in North America, the AIM-quoted business announced that it was about to launch in Florida and more specifically the Tampa and Orlando designated market areas. Purplebricks, which provides an online platform for property sellers to advertise their homes, already operates in DMAs spanning from Los Angeles to New York, San Diego, Las Vegas, Sacramento, Fresno and Phoenix.

Announcing details of the launch group chief executive Michael Bruce commented that “we are encouraged by our progress in the US and excited about the potential in Florida, and we continue to identify new markets in the US where our value proposition can greatly benefit both consumers and agents.”

Should you invest £1,000 in Purplebricks Group Plc right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Purplebricks Group Plc made the list?

See the 6 stocks

The investment community is becoming more and more sceptical over Purplebricks’ ability to continue disrupting the traditional estate agency market in the UK and further afield, however, with sentiment worsening as its expansion programme is eating significantly into its bottom line.

The City is expecting the property play to finally move into profit in the year to April 2020, but as geographic expansion lifts costs and conditions in its UK marketplace worsen, I reckon this prediction is looking a little optimistic right now.

Profits poised to reverse?

I would be very tempted to sell Purplebricks today given the possibility of more scary details emerging when it releases its six-month trading update on November 6.

And another share in the Woodford Income Focus Fund that I’d be happy to cut adrift today is BCA Marketplace (LSE: BCA).

The car auctions specialist advised earlier this month that “the year has started strongly,” and City brokers are expecting earnings at the FTSE 250 company to continue rising too — a 5% advance is currently forecast for the 12 months to March 2019.

But I’m concerned that analyst estimates could be subject to swingeing downgrades in the months ahead as the Brexit saga hobbles economic growth and thus consumer and business confidence in the UK. And worryingly, the market does not seem to be factoring in the high probability of such forecast reductions, as reflected by BCA’s slightly-high forward P/E ratio of 16.2 times.

Latest car sales data from the Society of Motor Manufacturers and Traders (SMMT) outlined the precarious outlook for the used vehicle segment, August’s recent report showing that 2.09m units were sold during the April-June quarter, down 0.4% year-on-year.

This annual drop may not have been shocking but, as the deadline to Britain’s planned exit from the European Union draws ever closer, I for one am expecting the decline to become much more pronounced. The SMMT itself is also expecting the used car market to remain in trouble, the body advising last month that “with used sales so closely reflecting the new car market, some cooling is expected over the coming months.” In my opinion holding BCA shares is a high-risk business today.

But there may be an even bigger investment opportunity that’s caught my eye:

Investing in AI: 3 Stocks with Huge Potential!

🤖 Are you fascinated by the potential of AI? 🤖

Imagine investing in cutting-edge technology just once, then watching as it evolves and grows, transforming industries and potentially even yielding substantial returns.

If the idea of being part of the AI revolution excites you, along with the prospect of significant potential gains on your initial investment…

Then you won't want to miss this special report inside Motley Fool Share Advisor – 'AI Front Runners: 3 Surprising Stocks Riding The AI Wave’!

And today, we're giving you exclusive access to ONE of these top AI stock picks, absolutely free!

Get your free AI stock pick

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Man smiling and working on laptop
Investing Articles

3 FTSE 250 shares with low P/E ratios and sky-high dividend yields!

Searching for the best bargains that London has to offer? Here's a handful from the FTSE 250 I think are…

Read more »

Investing Articles

Why is Apple stock lagging the S&P 500 in 2025?

Our writer is wondering whether now might be an opportune time to snap up shares of the largest company in…

Read more »

Investing Articles

Here’s how an ISA investor could build a £20k passive income with UK shares

Looking to make a five-figure passive income in retirement? Here's how a blend of UK shares and cash savings could…

Read more »

Investing Articles

£10,000 in savings? Here’s how an investor can target £3,560 in annual passive income

Paul Summers explains how an investor could target making thousands of pounds in passive income by holding great dividend stocks…

Read more »

Young Asian man drinking coffee at home and looking at his phone
Investing Articles

Up 490%, Lion Finance Group is a new name on the FTSE 250… but what is it?

Many investors won’t be familiar with Lion Finance Group, but the FTSE 250 stock has surged 490% over five years.…

Read more »

Growth Shares

I think this is the most punished FTSE stock in the market right now

Jon Smith talks through a FTSE company that has endured problems but is one he believes has a brighter future…

Read more »

Smart young brown businesswoman working from home on a laptop
Investing Articles

Stock market correction! 1 growth share down 53% to consider buying now

This writer highlights a growth stock that has hit a rough patch in recent weeks. Here's why it might be…

Read more »

Investing Articles

Here’s why the Tesco share price has dropped 18% in a month!

Tesco's share price has lost nearly a fifth of its value since mid-February. Is this FTSE 100 dividend stock now…

Read more »