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.
The Daily Telegraph: BP shares should be snapped up
The Times
Unilever has cast further doubt on the safe-haven status of selling consumer staples. Yesterday's 6% fall in the shares has priced in much of the uncertainty and has widened Unilever's traditional discount to its peers. But at £13.96, or ten times the best guess of 2009 earnings, the shares are susceptible to trade sideways until Mr Polman can provide greater clarity. Pass.
Compass Group, the world's biggest contract caterer, draws more than 80% of sales from outside the UK, such that the translation of overseas earnings has boosted first-quarter operating profits by £30m. At 357¼p, up 14¼p, or nearly 14 times earnings, there will be better times to buy. Avoid.
The Daily Telegraph
Shares in defence technology group QinetiQ have underperformed since December. The shares are trading on a March 2009 earnings multiple of 10.4 times, falling to 8.9 times in 2010. The yield, at 3%, is not outstanding but it is worth having. Ahead of the statement on February 10, the shares are a buy.
Questor believes Thursday fall in Unilever's share price was overdone. The shares are now around 7% below the initial recommendation price at the start of November after rising to close at £16 at the start of the year. Questor will be watching events closely from now on but, for the moment, a buy stance on Unilever shares remains. Buy.
THURSDAY
The Times
BHP Billiton, the world's largest miner, reported a 56.5% drop in profits and a writedown of $3.5bn (£2.4bn), but investors were sufficiently cheered by this news for the shares to surge 9% cent yesterday. BHP is also benefiting from low debt levels. With Xstrata and Rio Tinto both seeking ways to cut their debt to prevent defaults, BHP's strength is welcome for investors. Buy at £12.69.
Yesterday Quintain Estates' shares stood at 30½p after a 4½p rally amid relief that company had not yet breached its bank covenants. Much now depends on whether Lloyds Banking Group, HBOS's new owner, will approve a new valuation next month or insist on seizing control of the project. Avoid.
Shares Magazine
Kalahari Minerals, the metals exploration and mining investment company, investment in Australian listed resources group Extract is driving its share price. Extract has found much more uranium than the market expected. Buy.
SELL Tomkins, the power transmission and hydraulic products maker for automotive and industrial companies. Tomkins is unlikely to go bust but it looks like Sisyphus rolling a boulder up a hills. A long period of retrenchment and falling sales and profits seems inevitable. Sell.
WENESDAY
The Times Vittorio Colao, the new chief executive of Vodafone, has reason to be grateful that the mobile operator books about 60% of its sales in the currency of his native Italy. With the shares up by one third since their October low and underlying sales having now turned negative, 137.15p, or nine times current-year earnings, is a good point for short-term investors to take profits. Sell.
TUESDAY
The Times
Pretax profits from SThree were up a solid 11%, but it was the recruitment consultant's dividend declaration that drew greater interest in yesterday's full-year results statement. SThree has remained profitable throughout is 22-year history and is more broadly based than ever before – overseas revenues will eclipse those from the UK for the first time this year. Even so, at eight times this year's earnings, it feels too soon to buy. Hold.
Since Research Now, the market research specialist, floated on London's junior stock market nearly four years ago, its sales and operating profits have risen tenfold, it has used its paper to expand overseas and its shares have more than doubled. About 80% of Research Now's work is project-based, so it cannot see too far ahead, but, at 272½p, nine times earnings looks good value, given progress to date. Buy on weakness.
The Daily Telegraph
Questor believes that BP's share price falls are an opportunity to buy the stock and grab the yield at an attractive price. Based on current analysts' forecast for a progressive dividend payout the shares are trading on a December 2009 yield of a staggering 8.2%. Buy.
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