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Could you profit from Moneyball shares that others don’t like?

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could you profit from moneyball shares that others dont like

Avon Rubber and Games Workshop are among a number of undervalued ‘Moneyball’ companies identified by wealth manager Brewin Dolphin.

The firm has highlighted businesses that do not appear to have brilliant investment cases at first glance, but could be unlikely growth opportunities for investors.

They are considered ‘Moneyball’ companies due to their likeness to the baseball players selected for the Oakland’s A’s team back in 2002, which eventually saw them enjoy a surprise winning streak in the American League.

Brad Pitt (pictured) plays Billy Beane, general manager of the Oakland Athletics, in Moneyball

Brad Pitt (pictured) plays Billy Beane, general manager of the Oakland Athletics, in Moneyball

Brad Pitt (pictured) plays Billy Beane, general manager of the Oakland Athletics, in Moneyball

Rather than relying on the Oakland scouts’ experience and intuition, the team’s general manager used ‘sabermetrics’ to choose players with his limited budget.

He used statistics to look at players’ performance, beyond the usual factors that scouts focus on that don’t necessarily reflect ability.

This method was used to hire undervalued players such as unorthodox submarine pitcher Chad Bradford, aging outfielder David Justice, and injured catcher Scott Hatteberg.

The team went on to play better than ever and won a record-breaking 20 consecutive games.

This events of this story were told in Michael Lewis’ novel Moneyball, which was later turned into a movie biopic of the same name, starring Brad Pitt.

Brewin Dolphin's John Moore has identified companies that could be growth winners

Brewin Dolphin's John Moore has identified companies that could be growth winners

Brewin Dolphin’s John Moore has identified companies that could be growth winners

In the same way, Brewin Dolphin has identified companies that are overlooked for reasons that don’t necessarily reflect their fundamentals – such as having ‘boring’ products, operating in esoteric markets, or simply not being well-known.

John Moore, senior investment manager, said: ‘Aside from the rise of technology stocks, areas of growth have been relatively hard to identify for investors.

‘The UK market has not had the rebound that some other indices have enjoyed, largely because of its spread of constituents at the top end of indices – oil and travel companies, for example, remain near the lows of earlier this year. 

‘Appearances can be deceiving and looking beyond the surface could help investors spot unlikely opportunities for growth – particularly in the challenging economic environment brought about by the Covid-19 pandemic.’

The manager said he looks for businesses with solid cash generation, profitability, and manageable levels of debt from a financial perspective. 

While more difficult to find, he also strives for a driven management team which, when combined with the other factors, could provide the ability and finances to succeed. 

He added: ‘There are some UK names that continue to deliver strong results and have seen their share prices grow substantially, despite the investment case sounding a bit dull. 

‘While they might not be in the most glamorous sectors or make ground-breaking products, they are still brilliant businesses.’ 

Avon Rubber

Based in Wiltshire, Avon Rubber is a specialist manufacturer of respiratory equipment for the military, law enforcement, and fire services markets. 

It also produces milking equipment for dairy farmers and last year bought a ballistics protection business from US conglomerate 3M. Avon Rubber is a constituent of the FTSE 250 index and has returned a staggering 389.56 per cent over 10 years.

Moore said: ‘Avon Rubber was best known for its tyre business, which supplied Formula 1 at one point – but it has been much lower profile after selling that division in the 1990s. 

‘It decided to focus on some of its relatively unglamorous markets, such as milking and respiratory masks, which has only seen the business go from strength to strength. 

‘The acquisition of the ballistics protection business has added to its offering and now it is on the verge of joining the FTSE 100.’

Avon Rubber was best known for its tyre business, which supplied Formula 1 at one point

Avon Rubber was best known for its tyre business, which supplied Formula 1 at one point

Avon Rubber was best known for its tyre business, which supplied Formula 1 at one point

Moore believes Avon Rubber sells products that end markets want to buy and that is what puts it in a great position. 

In 2019, the company’s revenues rose to £179million and operating profit was up to £31million. In its last update, Avon said it should meet full-year expectations and its shares sit at record highs, so there are certainly opportunities for growth to be had. 

Games Workshop

A more widely-known name, most people will have heard of Games Workshop, or at least walked past one of its stores in towns and cities across the UK – they may even have seen them abroad, as it operates in 23 countries worldwide. 

It is best known for its Warhammer series of games and collectible figurines. Like Avon Rubber, it is a constituent of the FTSE 250 and has returned 446.13 per cent over 10 years.

Moore added: ‘The Games Workshop story has been incredible in recent years, with mammoth returns on its share – to the point where it is among the best performing stocks in the world. 

‘Most adults may be scratching their heads about the appeal, but there is a global fanbase for the company’s games, figurines, and other products, which have made it highly successful. 

‘Revenues rose to £270million in 2020, up on the previous year, while profit before tax was 10 per cent higher at £89million.’

Moore's Moneyball companies have all outperformed their FTSE 250 peers by a long way

Moore's Moneyball companies have all outperformed their FTSE 250 peers by a long way

Moore’s Moneyball companies have all outperformed their FTSE 250 peers by a long way

Genus 

Basingstoke-based Genus is at the forefront of the animal genetics business and has been a beneficiary of rising demand for pork in Asia, along with breeding changes in dairy and beef cattle. 

A key driver of demand for its product has been the desire for greater efficiency and sustainability in the production of milk and meat. 

Genus’ shares have returned 188.05 per cent over the past decade, with revenue and profits rising last year.

Moore said: ‘Genus was spun out of conglomerate Dalgety in the late 1990s and was almost forgotten about due to its size and poor investor sentiment. 

‘However, management has used a strong base of intellectual property and taken a patient, long-term approach, which has steadily built the now recognised global leader in its field.’ 

Investing through a fund 

It’s possible to invest directly in these companies, but many investors can gain exposure and spread their risk through investment trusts. 

One trust that looks to capture these types of opportunities is BlackRock Throgmorton, which aims to deliver long-term capital growth and an attractive total return by investing in UK small and mid-cap companies. 

Avon Rubber and Games Workshop are among its top holdings.

Performance of Moneyball businesses 
  2019 2018 2017 2016 2015
Avon Rubber 35.43% 36.92% 13.50% 2.26% 29.83%
Genus -5.37% 49.08% 0.96% 39.19% 18.94%
Games Workshop 23.32% 107.12% 223.73% -11.03% 0.52%
BlackRock Throgmorton 4.93% 23.28% 35.73% -0.98% 14.15%

‘It is not easy to identify or be patient with “moneyball” stocks individually and the risks can often be high given their size and typical focus on a narrow segment,’ said Moore.

‘Investment trusts like BlackRock Throgmorton are a great way to gain exposure to smaller companies that perhaps don’t have the biggest profile or operate in relatively niche areas. 

‘It also offers the benefit of being able to spread risk, rather than having all your capital in a single business. 

‘It has holdings in a range of potentially high-growth businesses, taking away the extremes that can sometimes come with investing in them.’ 

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Just 1% of DfT vehicles are electric and seven in ten are DIESELS

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just 1 of dft vehicles are electric and seven in ten are diesels

Fingers are being pointed at the Government for not setting the right example when it comes to switching to cleaner vehicles after an investigation revealed that just one per cent of the Department for Transport’s fleet are electric.

Of the 1,525 vehicles it currently uses, only 22 are pure electric models.

Incredibly, 1,328 of the department’s motors – which represents 87 per cent of the fleet – are diesels, despite the Government trying to force drivers out of these cars due to their ‘dirty’ connotations.

DfT not leading the way for switch to EVs: Just 22 of the department's 1,525 fleet of vehicles are battery electric models, according to a new investigation

DfT not leading the way for switch to EVs: Just 22 of the department's 1,525 fleet of vehicles are battery electric models, according to a new investigation

DfT not leading the way for switch to EVs: Just 22 of the department’s 1,525 fleet of vehicles are battery electric models, according to a new investigation

The statistics have been divulged by Air Quality News, which submitted a Freedom of Information request to the DfT to discover how clean its fleet currently is. 

Of the remaining 1,525 motors registered to the department, only 43 are petrol and 134 are hybrids.

Of the five association bodies as part of the DfT, the Government Car Service has the most pure electric models, with 18 out of 92 motors (20 per cent).

That compares to the Maritime & Coast Guard Agency having zero, with 99 per cent of its fleet being diesels (the remainder are petrol powered).

BREAKDOWN OF THE DEPARTMENT FOR TRANSPORT’S VEHICLE FLEET 
Name of association body Pure electric vehicles Hybrid vehicles Petrol vehicles Diesel vehicles
Driver and Vehicle Licencing Agency (DVLA) 2 9 0 21
Driver and Vehicles Standards Agency (DVSA) 1 97 8 779
Government Car Service 18 26 28 20
Maritime & Coast Guard Agency (MCA) 0 0 7 503
Vehicle Certification Agency (VCA) 1 2 0 3
Total 22 134 43 1,326
Source: Air Quality News FOI request to the Department of Transport

The breakdown of its fleet and obvious reliance of diesel is likely to spark anger among private vehicle owners and the motor sector in light of the Government’s five-year crackdown on oil burners since the Volkswagen emissions cheating scandal.

With diesel being coined the ‘dirty’ fuel type, after it was revealed in 2015 that some VW Group models were producing almost 40 times the legal level of harmful nitrogen oxide (NOx) emissions, ministers have since increased taxation on cars with diesel engines.

This ‘demonisation’ of diesel has also seen tougher restrictions on their use in city centres, with only the latest models adhering to Euro6 emission standards eligible for the Ultra Low Emissions Zone in London and Clean Air Zones being proposed by other cities around the country from next year.

Some councils have also proposed introducing bans on the use of older – or all – diesel cars in their areas in a bid to reduce air pollution.

Free entry to the Ultra Low Emission Zone is only available to the latest diesel cars meeting Euro6 emission standards

Free entry to the Ultra Low Emission Zone is only available to the latest diesel cars meeting Euro6 emission standards

Free entry to the Ultra Low Emission Zone is only available to the latest diesel cars meeting Euro6 emission standards 

Numerous cities have proposed localised or central bans on diesel cars as part of efforts to reduce air pollution

Numerous cities have proposed localised or central bans on diesel cars as part of efforts to reduce air pollution

Numerous cities have proposed localised or central bans on diesel cars as part of efforts to reduce air pollution

As a result of these measures, demand for diesel cars has plummeted in recent years.

At the height of their popularity – when the government was promoting oil burners for their lower carbon emissions – diesel made up around half of all new cars bought in the UK.

Latest industry figures show that just 14 per cent of new cars bought in September 2020 were diesels.

This has also sent the value of diesel models crashing, especially for owners living in cities, as buyers of second-hand vehicles shun them in favour of used petrol, hybrid or electric cars.

Just 14% of new cars registered in September 2020 were diesels. Five years earlier, diesel cars made up around half of all new vehicles bought

Just 14% of new cars registered in September 2020 were diesels. Five years earlier, diesel cars made up around half of all new vehicles bought

Just 14% of new cars registered in September 2020 were diesels. Five years earlier, diesel cars made up around half of all new vehicles bought

Department for Transport’s fuel type share across its fleet

Diesel: 87%

Hybrid: 9%

Petrol: 3%

Electric: 1%

Source: Air Quality News 

The results of the investigation also show that the government has made little progress in leading from the front for a switch to low-emissions cars. 

In 2018, ministers pledged that a quarter of central government vehicles would be electric by 2022. 

That would require the Department for Transport to increase its electric car fleet from 22 to 381 in the next two years.

The Government said its entire fleet would be 100 per cent electric in 2030, which is just five years before the proposed ban on the sale of new petrol, diesel and hybrid cars is widely expected to be enforced.

The Department for Transport listed its hybrid cars as ultra-low-emission vehicles, despite research suggesting they are two-and-a-half times more polluting than official figures suggest

The Department for Transport listed its hybrid cars as ultra-low-emission vehicles, despite research suggesting they are two-and-a-half times more polluting than official figures suggest

The Department for Transport listed its hybrid cars as ultra-low-emission vehicles, despite research suggesting they are two-and-a-half times more polluting than official figures suggest

Air Quality News said the incredibly lower number of electric cars in the DfT fleet is ‘particularly concerning’ given that road transport is – according to research –  responsible for 80 per cent of NOx emissions. 

It said the DfT had labelled its hybrid-powered cars as ‘ultra low emission vehicles’, as part of efforts to deceive onlookers about the eco credentials of its fleet.

However, studies by environmental campaign groups revealed earlier this year that hybrid cars aren’t as clean as they are being advertised.

Carbon dioxide emissions from plug-in hybrid vehicles – also known as PHEVs – are an average of two-and-a-half times higher than official tests indicate, joint analysis by Greenpeace and Transport & Environment found.

They claimed a typical PHEV emits 117g of CO2 per kilometre on the road, compared with the 44g suggested in official measurements conducted in laboratory conditions.  

The results of the investigation also show that the government has made little progress in leading from the front for a switch to low-emissions cars

The results of the investigation also show that the government has made little progress in leading from the front for a switch to low-emissions cars

The results of the investigation also show that the government has made little progress in leading from the front for a switch to low-emissions cars

Commenting on the DfT’s fleet, Transport & Environment UK director Greg Archer said it had ‘a mountain to climb’ to hit its 2022 targets and said it should be ‘leading the shift to clean vehicles, not hanging on to the past’. 

In response to the Air Quality News report, a DfT spokesman said: ‘We’re committed to transitioning to cleaner, greener vehicles across government, which is why almost half of the Department for Transport’s Government Car Service fleet are ultra-low emission vehicles and why we’re working to increase the number of green vehicles in the fleet as quickly as possible.

‘Central government is working at pace to transition a quarter of its fleet to electric by 2022 and all cars to electric by 2030 and are supporting the UK’s shift to electric vehicles.’

SAVE MONEY ON MOTORING

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Utilita to pay £500,000 in compensation after overcharging 40,000 customers

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utilita to pay 500000 in compensation after overcharging 40000 customers

Challenger energy provider Utilita has agreed to pay £500,000 in compensation after it overcharged almost 40,000 customers.

Ofgem, the industry watchdog, said prepayment customers were overcharged by a total of more than £125,000.

Pre-payment customers are some of the most vulnerable as they are often those who struggle to pay their energy bills.  

Ofgem said the affected customers have now been refunded by Utilita and will also receive at least £10 in a goodwill payment as part of the compensation package. 

Utilita has agreed to pay £500,000 in compensation to customers after it overcharged them

Utilita has agreed to pay £500,000 in compensation to customers after it overcharged them

Utilita has agreed to pay £500,000 in compensation to customers after it overcharged them

A further payment of £140 will also be made to around 900 Utilita customers who applied to the supplier for the Government’s Warm Home Discount scheme but were unsuccessful.

An additional £45,000 will be paid into Ofgem’s Voluntary Redress Fund as part of the £500,000 payout.

The regulator said its investigations found around 6,600 prepayment customers were overcharged by a total of £22,700 over the prepayment price cap.

Meanwhile, around 33,000 customers were overcharged by a total of £105,000 over what they should have paid under their advertised energy tariff.

Utilita reported itself to the regulator for mistakenly overcharging customers between May and September 2019.

Bill Bullen, Utilita’s CEO, said: ‘I would like to apologise unreservedly to all customers who were temporarily out of pocket. I am sorry that we did not issue prompt refunds during the period in question.

‘We know we can always improve and will always take on board criticism of any legitimate failings. 

‘Ofgem made it clear that the overcollection was caused by our failure to carry out an administrative process that corrected the temporary overcollection.

‘I can reassure customers that the issue was not with the tariff itself, which was confirmed to be in accordance with the cap.’

Suppliers cannot charge prepayment meter customers more than the level of the cap, which ensures they pay a fair price for their energy.

Ofgem sets the level of the cap and monitors suppliers’ compliance to make sure they do not charge customers more than the level of the cap.

Thousands of households found they were overcharged by Utilita, a challenger supplier

Thousands of households found they were overcharged by Utilita, a challenger supplier

Thousands of households found they were overcharged by Utilita, a challenger supplier

Cathryn Scott, director of enforcement and emerging issues at Ofgem, said: ‘Ofgem closely monitors suppliers’ compliance with the price cap, which ensures consumers pay a fair price for their energy.

‘This case sends a message to all suppliers that Ofgem will intervene if they charge customers above the level of the cap or above advertised tariffs.

‘It also shows that, where appropriate, Ofgem is prepared to work with suppliers who have failed to comply with their obligations but who have self-reported and are willing to put things right quickly.’

Richard Neudegg, head of regulation at Uswitch, added: ‘Utilita’s overcharging affected almost 40,000 prepayment customers, a group which includes vulnerable people.

‘While the amounts overcharged would likely have been relatively small for most, it’s really important that customers have confidence their supplier is charging them accurately.

‘It is positive to see that Utilita has agreed to pay £500,000 in redress, and will compensate all affected customers. In particular, focusing payments towards customers likely in the most vulnerable circumstances.

‘Utilita has now refunded affected customers. But any customer who believes they may have been affected but have not heard from Utilita should contact the supplier.’ 

The energy price cap, introduced by Ofgem, was launched in January 2019 as a way of keeping down the cost for households across the UK.

It is currently set at £1,042 for standard variable tariff customers whilst the savings are bigger for prepayment meter customers whose bills are capped at £1,069.

Suppliers are not allowed to charge above the cap but they can offer cheaper deals for savvy customers.

Recently it was revealed the cap has been extended will remain in place until the end of 2021 when the level will be reviewed.

However, customers stuck on pricey tariffs are encouraged to use price comparison services to see if they could save money by switching to a different supplier or move to a fixed tariff, which are typically much cheaper than default options.

Could you cut your energy bills… or help the planet and go green? 

Millions of people could be needlessly overpaying for their energy as they fail to switch to providers who offer cheaper deal.

They may also be missing out on the opportunity to help the planet and fight climate change, by switching to green deals that offer electricity from renewable sources and more environmentally-friendly gas.

With our partner, Compare the Market, you can compare energy tariffs and exclusive deals.

Why not find out if you could save hundreds of pounds a year on your energy or go green?

>> Check to see if you can start saving money now

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Starling and Monzo top the charts for current account switches

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starling and monzo top the charts for current account switches

The number of people swapping current accounts between July and September using the official switch service rose almost two-fifths on the previous three months, data shows.

136,575 switches took place during the latest three month period as banks brought back three-figure welcome bonuses which had vanished over the coronavirus lockdown.

With only 98,192 people switching during the first three months of lockdown, several high street banks have since begun re-offering cash incentives in a bid to entice new customers.

Lockdown winner: Starling Bank managed to bag the most amount of switching customers, while losing the least between April and June, data shows

Lockdown winner: Starling Bank managed to bag the most amount of switching customers, while losing the least between April and June, data shows

Lockdown winner: Starling Bank managed to bag the most amount of switching customers, while losing the least between April and June, data shows

NatWest and HSBC are currently incentivising new customers to switch with a £125 switch offer. 

RBS and Lloyds Bank meanwhile are similarly teasing new customers with a £100 incentive.

The switching service revealed that while the number of switchers grew in the summer, more people switched in January and March pre-pandemic, than the six month period afterwards. 

Andrew Hagger, from the personal finance site Moneycomms, said: ‘Between April and June the numbers of people switching dropped off a cliff but this data shows that it’s starting to pick up again.

‘When you think of the 113,000 people who switched in March alone this year, it’s clear we are a long way from normal.

‘People have a lot more to worry about at the moment so switching bank account is probably not that high on the list of priorities, but with more banks beginning to offer incentives that could change.’ 

The move for banks to reintroduce bribes comes after the digital smartphone banks won the switching battle between April and June, the most up-to-date figures its provides. 

That means we’ll have a clearer picture in the next set of figures as to just how important these incentives are to snag customers.  

Monzo and Starling winning switching customers is key for the challengers, as they battle to get people to use it as their main current account, rather than just a secondary one. 

Starling proved the most popular. It gained 12,786 customers and lost just 788.

Although more customers switched to Nationwide, Britain’s biggest building society also saw 6,270 switch away from it between April and June. 

Online and mobile banking offerings and better customer service were reported as the most common reasons why customers would switch bank accounts, rather than upfront welcome bonuses.

This is potentially one reason why Monzo and Starling continue to perform strongly and steal customers away from the established banks.

Which banks gained the most customers during lockdown?

Bank:                  Gains:                          Losses:                     Gains per loss:   

Starling             12,786                        788                            16.2

Monzo               12,788                        1,395                         9.17

Nationwide      16,353                       6,270                        2.61

Natwest            12,350                       8,216                         1.50

RBS                     1,601                          1,373                          1.17 

Jon Ostler, chief executive of the personal finance comparison site Finder, said: ‘The lack of switching incentives from the big banks over lockdown is a likely explanation as to why digital-only banks take the top two positions for net gains.’

Ostler added, that the parity between current account offerings during lockdown gives a more natural indication of consumer preference. 

He believes that although Monzo and Starling will be delighted with the top two spots, both now face a challenge from the main high street banks whose switching incentives have historically driven up their customer numbers at the expense of others.

With the news on Tuesday that HSBC could begin charging for current accounts people may be incentivised in future months to switch just to avoid losing money.

John Crossley, head of money at Compare the Market, said: ‘If the demise of free current accounts becomes a reality this may further increase the numbers switching.

‘Customers deserve easy access to their finances and value for money, and the increase in switching in the most recent quarter suggests that many people are dissatisfied with their current provider and voting with their feet.’  

The two banks which performed the worst were Santander and Halifax, two providers that until recently regularly topped the charts.

Santander lost a net 12,532 customers and Halifax 10,019. Santander and its 123 current have seen a number of perk cuts in recent years, including some this week which saw change in cashback terms.  

Who did best in 2019?

With switching data for individual banks now available for all 12 months of 2019, here are the banks which gained the most switchers last year:

– Nationwide Building Society – ‭105,157‬

– HSBC – ‭63,635‬

– Monzo – ‭63,164‬


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#bcaTable {font-family: Arial, ‘Helvetica Neue’, Helvetica, sans-serif; font-size:14px; line-height:120%; margin:0 0 20px 0; padding:0; border:0; display:block; clear:both;}
#bcaTable {width:636px; float:left; background-color:#f5f5f5}
#bcaTable .title {width:100%; background-color:#58004c}
#bcaTable .title h3 {color:#fff; font-size:16px; padding:7px 8px; font-weight:bold; background:none}
#bcaTable .item {display:block; float:left; margin-bottom:10px; border-bottom:1px solid #e3e3e3; margin:0; padding-bottom:0px; width:100%}
#bcaTable .item#last {border-bottom:0px solid #f5f5f5}
#bcaTable .copy {padding:7px 10px 7px 10px; display:block; font-size:14px}
#bcaTable a.mainLink {display:block; float:left; width:100%}
#bcaTable a.mainLink:hover {background-color:#E6E6E6; border-top:1px solid #e3e3e3; position:relative; top:-1px; margin-bottom:-1px}
#bcaTable a.mainLink:first-child:hover {border-top:1px solid #58004c;}
#bcaTable a .copy {text-decoration:none; color:#000; font-weight:normal}
#bcaTable .copy .red {text-decoration:none; color:#de2148; font-weight:bold}
#bcaTable .copy strong, #bcaTable .copy bold {font-weight:bold}
#bcaTable .footer {display:block; float:left; width:100%; background-color:#e3e3e3; margin-bottom:0}
#bcaTable .footer a {float:right; color:#58004c; font-weight:bold; text-decoration:none; margin:10px 18px 10px 10px}
#bcaTable .mainLink p {float:left; width:524px}
#bcaTable .mainLink .thumb span {display:block; float: left; padding:0; line-height:0}
#bcaTable .mainLink .thumb {float:left; width:112px }
#bcaTable .mainLink img {width:100%; height:auto; float;left} #bcaTable .article-text h3 {background-color:none; background:none; padding:0; margin-bottom: 0}
#bcaTable .footer span {display:inline-block!important;} @media (max-width: 670px) {
#bcaTable {width:100%}
#bcaTable .footer a {float:left; font-size:12px; }
#bcaTable .mainLink p {float:left; display:inline-block; width:85%}
#bcaTable .mainLink .thumb {width:15%} #bcaTable .mainLink .thumb span {padding:10px; display:block; float:left}
#bcaTable .mainLink .thumb img {display:block; float:left; }
#bcaTable .footer span img {width:6px!important; max-width:6px!important; height:auto; position: relative; top:4px; left:4px}
#bcaTable .footer span {display:inline-block!important; float:left} } @media (max-width: 425px) {
#bcaTable .mainLink {}
#bcaTable .mainLink p {float:left; display:inline-block; width:75%}
#bcaTable .mainLink .thumb {width:25%; display:block; float:left} }

THIS IS MONEY’S FIVE OF THE BEST CURRENT ACCOUNTS

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