Sunday & mid-week share tips

By This Is Money
Updated: 08:58 EDT, 21 January 2007

Each week we round up the Sunday newspaper share tips and the views of the mid-week tipsters too.

For the Mail on Sunday's stock picks read the Midas column

Sunday Telegraph

Cranswick, which makes cooked meats, sausages, bacon, pasta and sandwiches, is likely to have benefited from the Christmas trend - reported by Tesco and Sainsbury's in recent days - that saw shoppers trade up to premium ranges.

At its interim results in November, Cranswick reported sales up by 14% and profits 11% higher. The company, which produces sausages on behalf of Duchy Originals, is expected to release an upbeat trading statement over the next few weeks.

Wolseley shares have recovered ground since August, when the building and plumbers' merchant took a hammering because of fears for America's housing market. While that situation remains a concern, mortgage application data suggest the slump in the American housing market as a whole is bottoming out.

Despite its recovery over recent months, Wolseley still looks cheap at 1349p. Citigroup has a target price of 1680p, while Merrill Lynch reckons 1420p.

Renewable energy firms have attracted plenty of attention in recent months, causing shares in the sector to soar. However, US-based Renova Energy may still be worth a look, as in November it reported that pre-tax profits had doubled to 1.1m US dollars (£557,400) on turnover seven million US dollars (£3.5m) higher at 12m US dollars (£6.1m).

The company produces, markets and distributes ethanol from a network of bulk storage terminals, enabling it to provide its customers with access to a lower-cost alternative to regular gasoline. Investing in alternative energy stocks is always risky, but Renova looks a solid bet at 150p.

Oil company Energy XII appears well placed, despite the recent fall in prices to 50 US dollars a barrel. Since listing in October 2005, the company has spent around 750m US dollars (£380.1m) on a pair acquisitions in the US, which have helped boost production to 16,000 barrels of oil equivalent per day. An extensive hedging programme acts as a buffer to any changes in oil and gas prices, meaning that the potential downside for investors is limited. The company plans to spend more than 100m US dollars (£50.7m) on exploration in its current financial year, which should add to its reserves. Buy at 4.85 US dollars.

And the mid-week share tips...

Over the past four years Mothercare has overhauled its supply chain and developed a strong out-of-town format.

But Mothercare's high operational gearing means that a dip in sales has a big effect on profits. The shares trade at 15½ times 2007 forecasts, which is up with events. Hold says the Times.

Mark Throdahl, the chief executive of Bespak yesterday stated that the £190m medical devices maker plans to double its pre-tax profits over the next five years.

Until Throdahl shows signs of delivering on his profit growth plans, the shares — which, at 664p, trade at 14.8 times 2007 forecasts — are only a hold.

With momentum expected to be carried into the second half and the potential for another acquisition over the next twelve months there is a lot to keep investors happy. Buy says the Independent.

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With profits not expected until 2008, and a market capitalisation more than 12 times last year's sales, Plant Health Care is not a stock for the faint- hearted. Worth a closer look, says the Times.

The Independent says given the tie-up with Bayer could potentially be worth up to £25m to PHC in the US alone, even after yesterday's rise Plant Health Care stock looks to offer good value.

Even if you're not a fan of the revived Doctor Who, it will be a while before this lucrative revenue line is exterminated and, even then, Character Group has a good portfolio of toys and games which should help growth to continue, says the Telegraph.

Augean's management is conducting a strategic review of the business. Its sale is one option they will consider. Whether One51 has the firepower to swallow the whole group is unclear - however, there are plenty of others who certainly do, says the Independent.

It is hard to avoid the suspicion that Debenhams' best days may have coincided with its period of private equity ownership.

The shares offer a yield of 4% and, at 11 times 2007 profits, may appear cheap. But once Debenhams' high gearing is taken into account, the multiples become far less appealing. Steer clear says the Times.

Significant risks remain for surgical equipment group for Gyrus, not least the transfer of productio! n to Mexico. Gyrus also draws 90% of revenues from the US, making it the healthcare stock most exposed to a faltering dollar. The shares trade at 20 times 2007 forecasts and pay no dividend, but their discount to its US peers, and scope for upgrades, are reason enough to hold on says the Times.

If a credit crunch does come Bluebay stands to reap rewards. With $3.62bn of assets, the fixed income fund manager's long-short distressed debt fund is the leader in its sector. But shares in Bluebay, up 20% since November's float, appear to have priced in these prospects. They trade on 24.6 times 2007 earnings forecasts, leaving little room for error. Avoid says the Times.

Enterprise Inns, the UK's second biggest pub owner, has always been a terrific generator of cash, and that is unlikely to change any time soon. City analysts have suggested that a move to the more tax-efficient Reit structure could create substantial value for shareholders. This prospect makes the stock well worth holding says the Independent.