Sunday newspaper share tips
Each week, we round up the main share tips from the Sunday newspapers. For the Mail on Sunday's stock picks read the Midas archive.
Sunday Telegraph
Dairy Milk maker Cadbury Schweppes' fortunes are on the rise despite a difficult year. Although the company has had to deal with factors such as rising raw material prices and a more difficult consumer environment, its cost-saving programme should improve margins.
The group is also floating its US drinks business - which makes 7Up and Dr Pepper - after a sale was scuppered last year by the credit crunch, leaving investors with shares in both companies. With the going set to get better, Cadbury looks a buy at 562.5p.
Maidenhead-based construction firm Costain announced its first dividend payment for 17 years last week as the company seeks to put its recent turbulent history behind it. Although the company's property investments in Spain have been exposed to weaker markets, Costain's order book remains healthy at £1.6bn and the company looks cheap compared to sector peers.
>> Buy at 21.25p.
Public relations and marketing group Chime Communications posted a 29% increase in profits last week and said it saw no sign of a slowdown in business, but investors took a different view last week and marked the stock down. The company's strong balance sheet and discount to other media companies makes the sell-off look overdone.
>> Long-term buyers at 30p could reap rewards.
Construction group ISG has wisely reduced its exposure to the faltering London office refurbishment market in recent years, increasing its regional presence and building up relationships with major retailers. The group was rewarded with a 43% increase in first half profits to £5.8m, although investors remain wary over prospects.
>> Buyers should take advantage of a cheap opportunity at 190p.
Independent on Sunday
The motor dealer Inchcape is driving hard to establish itself in emerging countries. A fast-growing middle class has the cash to splash out on imported up-market brands such as BMW, Audi and Toyota/Lexus.
The group has delivered the goods for the sixth year running. Group profits rose by a better-than-expected 9.9% to £235m. The UK chipped in £70m, up 52%, while emerging markets nearly tripled profits to £29.6m. Overall sales increased a quarter to £6bn.
The group's exposure to the weakening UK car market has contributed to the 27% decline in the share price over the past year. But as the international drive builds up, so the UK will soon take on much less significance. The shares are trading on a multiple of 10 times 2008 earnings. Buy.
Dechra Pharmaceuticals develops and markets a range of healthcare products for a market worth over £10bn and growing at 5-10% a year. First-half profits increased by a quarter to £7.4m, helped by the continuing success of its key product, Vetoryl, a treatment for Cushing's disease. There are high hopes that the drug will soon be cleared for launch in the US, the largest pet market in the world, along with another of its products, Felimazole.
£61m acquisition VetXX is an excellent fit. It sells into eight European countries where Dechra was not represented. The integration is still at an early stage, but a number of opportunities for launching Dechra drugs through its network have been identified.
Dechra is firing on all fronts. The home market is strong, further sales growth in Europe is likely following the acquisition, while approval for its key drugs in the US will provide a big sales boost. The shares have risen 26 per cent in a year and look up with events for the time being. Hold.
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