Newspaper and magazine share tips
Each week we round up share tips from national newspapers and investment magazines. For the Mail on Sunday's stock picks, read the Midas column.
EasyJet is sticking to its guns and not planning any cutbacks this winter, according to the Times
FRIDAY
The Daily Telegraph
It is impressive that amid a surge in raw milk prices the Dairy Crest Group has been able to pass on cost increases to customers at the same time as driving down its own manufacturing and distribution costs. Although analysts were not upgrading forecasts yesterday, the shares still shot up nearly 10%, to leave them trading on a earnings multiple of just 6.6 times. Dairy Crest holders should have the confidence to stick with the group for the long term. Hold.
Priced at 555p a share, Fresnillo's flotation attracted huge interest, but the Mexican group has followed the pattern of the other major indices since then. Despite a 12% rise in the price of silver since the float, the stock has lost the best part of 20%. The poor performance of Fresnillo shares since listing shouldn't dent its prospects of joining the FTSE 100 later this year, at which point the discount to others in the sector could narrow. Its shares still appear cheaper than many of its peers and offer an attractive entry point for investors looking for long-term growth. Buy.
The Times
The conference and professional publishing group Informa represents one of the most interesting investment problems in the current market. Buy in at 395p and, if the bid lands as advertised, make a handy 28%. But with Informa's debt at these levels there is plenty of risk, too. It amounts to little more than a bet on the credit markets. Fun for traders, perhaps, but a bad basis for an investment. Avoid.
EasyJet is sticking to its guns and not planning any cutbacks this winter, although this position could well change as the economic gloom deepens. The record oil price has seen projections for easyJet's pretax profits this year come down by £100m to £135m. Yesterday's 8% jump in the share price suggests a rally could be on the cards if crude continues to fall. Avoid.
Investors Chronicle
Glaxosmithkline saw its shares dip below £10 in March. However, the pharmaceuticals giant rebounded aggressively to their current £11.89. The stock has a safe-haven investment status and its consumer health division is growing strong. Glaxo is famed for having one of the biggest drugs pipelines among the pharma players, making this a good share for the bear market. Buy.
Shares in Topps Tiles, the tiles and wood flooring specialist –should still be treated with caution. The company has £111m worth of debt on its balance sheet and a further dividend looming. With trading likely to remain poor for years rather than months and the clock ticking on the group's £111m debt facility the shares look vulnerable. Sell.
THURSDAY
The Times
While the rest of the high street faces up to the worst downturn for a decade, Thorntons reported total sales growth of 16.8% for the ten weeks to June 28, with like-for-like growth at its stores of 3.6%. Shares in the retailer have underperformed the sector by 8% in the past three months and were at their lowest levels for seven years a week ago. It may be jumping the gun, but Thorntons is worth keeping in the portfolio. Hold.
Asia-focused oil group Salamander Energy deserves credit for pulling off a $200m fundraising yesterday. At 300p per new share the fundraising represents a vote of confidence in the company. With a busy drilling programme over the next few months, there is plenty of scope for further gains, making Salamander a cautious buy at 285p.
The Daily Telegraph
JD Wetherspoon appears one of the best placed among the sector's major players. The pub group showed that sales were flat compared with last year, and in today's consumer sector, that's worth raising a glass to. However, Wetherspoon's share price has fallen 44% since February. Avoid.
Icap, which provides over-the-counter broking services for the wholesale financial markets, continues revelling in the market volatility, with like-for-like revenue climbing 15% in the quarter to June 30. However, longer the volatility continues, the more investors are likely to flee in the long run. Nonetheless, Icap has proven itself a sound, well-run business, and those already invested should not lose their nerve now. Hold.
Shares Magazine
Nighthawk Energy, which develops low-risk oil and gas projects in the US, is one of the smaller companies in the sector that is finding success. The shares have come off by 35% from record highs since the beginning of June. Nighthawk's low-risk approach and its position in a low-cost environment ensure that it is better placed than most. Buy.
BlueBay Asset Management, the alternative fund manager running long and short portfolios with a focus on European corporate bonds and emerging market debt, has seen its share fall 35% since a profit warning on June 16. However, fund inflows should remain healthy and tomorrow's (18th July) year end trading update will reassure. Buy.
WEDNESDAY
The Daily Telegraph
Burberry, the luxury retailer and wholesaler, has suffered from the negative sentiment affecting the retail sector; its shares have fallen from 665p last July to just under 400p now. However, Burberry has strong expansion plans, very little net debt and has successfully shaken off the 'chav' tag. The company also has dividend yield of more than 3%. Fashion, it is said, never goes out of fashion, making Burberry well worth holding on to.
Hill & Smith Hldgs, the construction products group, make the electronic message signs you see above motorways, as well as safety crash barriers and street lamps. The group has been forced to deal with the challenge of soaring steel prices. The £200m company said yesterday it would post results for the half-year that would come in ahead of market expectations and the shares ticked up nicely in response. Buy.
The Times
At British Airway's annual meeting yesterday, both Willie Walsh and his chairman Martin Broughton were quick with the guilty pleas on a range of mishaps and cock-ups. BA's share price in the last downturn fell from a peak of 760p to 86p in 2003. The fall was precipitous because of the gearing effect of BA's then hefty debt. Things are different this time. A tough climate will encourage greater discipline at BA. BA should recover faster than its rivals. However, avoid for now.
There is little doubt that this year is crunch time for Premier Foods. Shares in the company floated at more than 200p four years ago, yet now are hovering around 75p, valuing the business at only £620m. Until Premier allays concerns once and for all, the shares are likely to drift. Avoid.
TUESDAY
The Times
Kingfisher, home to B&Q, has seen its share price drop to 100p, just 60% of last year's levels. There is little to suggest an upturn is likely in the DIY market for some time yet, but B&Q could be among the better-placed groups in Britain when consumers start to spend again. Retail stocks still come with a heavy health warning, given the risks to the economy, but expect Kingfisher to jump sharply when the consumer starts spending again. Hold
IQE, a little-known electronics manufacturer from Cardiff, looks set for success from the roll out of high-speed wireless networks and new technologies. With the share price of 15p more a reflection of short-term concerns over handset growth than prospects for higher volumes and longer-term involvement in next generation chips, those with a medium to longer-term view should buy.
The Daily Telegraph
London Stock Exchange, which held its AGM and published a trading update this week, has been notably devoid of friends of late. However, sales from the trading-services division, consisting of the cash equities, derivatives and fixed-income trading, rose 1% to £75.1m. Nevertheless, with the challenges stacking up, LSE shares look a little too risky at present and we recommend giving them a wide berth. Avoid.
Autonomy, the UK's second largest software group, said revenue is expected to be between $122m (£61m) and $125m, versus a consensus estimate of $118m. On 34 times 2008 earnings, the stock commands a significant premium over its peers. Questor believes at these levels it looks fairly valued and upside from here is limited. Hold.
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