UK stock picks spotlight Castings and Tatton buys, Boohoo hold

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UK stock picks: Castings, Tatton, Boohoo

Highlights

Tatton Asset Management's assets under management rose to £26.5 billion as of June 12, up 9 per cent from year-end, with adjusted operating profit up 24 per cent to £28.5 million and a 42 per cent dividend increase.
Castings anticipates a 5-10 per cent customer schedule increase after commissioning a new foundry line, despite European heavy truck demand being 10 per cent below trend and early-year power disruptions.
Boohoo cut pre-tax loss by 69 per cent to £108.6 million through cost controls, but sales and gross merchandise value each declined over 20 per cent, maintaining a hold rating.

Company calls and operating drivers

As reported by Financial Times, this week’s selections favor Castings and Tatton Asset Management as buys, while Boohoo Group remains a hold based on current trading, earnings outlook and valuation metrics.

Castings is navigating weak heavy-truck demand, a segment that accounts for 70 per cent of revenue, even as its foundry business records a slight increase in sales-weight demand and CNC Speedwell delivers what the company describes as another solid performance. Chair Alec Jones says the original equipment manufacturers the group serves suggest European heavy truck demand is about 10 per cent below a normalized trend level.

The group is also commissioning a foundry production line at its William Lee site in Derbyshire, expanding production capabilities and supporting bids for work that had previously been out of reach. Castings says customer forward schedules currently suggest a 5-10 per cent increase, although the first two months of the current financial year are disrupted by power supply issues from Northern Powergrid.

Tatton Asset Management is maintaining its target of reaching £30 billion in assets under management by 2029 after reporting revenue growth of one-fifth and a 42 per cent dividend increase. Assets under management rise further to £26.5 billion as of June 12, up 9 per cent from the year-end, while adjusted operating profit increases 24 per cent to £28.5 million and margin improves 170 basis points to 52.3 per cent.

At Boohoo Group, cost control remains central to the investment case as the retailer cuts its pre-tax loss by 69 per cent to £108.6 million, helped by lower restructuring costs. The company is shifting toward an asset-light online marketplace model, but sales fall and gross merchandise value declines by more than one-fifth, leaving analysts cautious despite a discounted valuation against other UK retailers.

Valuation signals and sector implications

Castings trades at 14 times forecast earnings and only a small premium to net assets, with FactSet consensus pointing to earnings per share of 22.2p and 24.2p in full-year 2028. The investment case rests on automation spending, broader product capability and exposure to a recovery in heavy-truck demand, alongside newer opportunities in agricultural machinery and wind energy.

Tatton trades on 18 times forward consensus earnings for 2027, below its five-year average of 27 times. Supporters of the stock point to continued asset growth, resilient model portfolio demand and the possibility that its 2029 assets target is reached earlier if market conditions remain supportive over the next 12 months.

Boohoo trades on an enterprise value to EBITDA ratio of 8.4, reflecting both turnaround potential and persistent execution risk. While the move to a marketplace model may lower inventory over time, weaker sales trends mean the stock remains a hold rather than a stronger buy call.

Our earlier analysis of Dover Corporation (DOV) looked at how stronger quarterly revenue—supported by global demand for industrial machinery and rising automation investment—was improving earnings visibility and sustaining buying interest. We also highlighted mixed but broadly bullish technical signals, with the stock expected to trade in a defined range while traders watched key support near $218.10 and resistance around $224.03 for confirmation of the next directional move.

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