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
FRIDAY
The Times
Given that Aggreko books 70% of its sales in American dollars, recasting last year's numbers at current exchange rates implies 2009 pre-tax profits of £250m, or roughly £60m more than consensus estimates. The shares rose 9% in response. The short nature of the company's order book means that it cannot see very far ahead. Even so, at 412½p, up 35¼p, or eight times revised 2009 forecasts, the shares should be held.
Cobham, the FTSE 100 defence contractor, has 90% of its borrowings in US dollars. Even so, spending on defence electronics – Cobham's niche is complex assemblies and subsystems – tends to be among the last to suffer. At 183½p, or 11 times earnings, hold.
The Daily Telegraph
The Questor column has rounded up the top five companies regarding dividend payments. BP, Primary Health Prop, Reckitt Benckiser, Imperial Tobacco and SABMiller have all made the list of recommended investments.
THURSDAY
The Times
IMI, a supplier of valves to the energy sector, emerged with much the same message. Sales from that niche were up an above-forecast 10% over the past three months. The short-term outlook is grim. But at 255½p, or seven times 2009 earnings, IMI is worth holding for income alone.
Yesterday Sportingbet, the online bookmaker, reported a 35% jump in second-quarter underlying operating profits to £10.1m. The shares have nearly doubled since October's low but with net cash of £27m and profits still rising, at 40p, or eight times earnings, they have farther to go. Buy on weakness.
Investors Chronicle
The tide has turned on cruise ship operator Carnival, and 2009 could prove extremely stormy. Customers are opting for cheaper cruises and there is no dividend support for the share price. Sell.
Thorntons, Britain's biggest independent chocolate specialist, is facing a sticky situation in the current market. The company has slashed its half-year dividend from 1.95p to 1.2p, but analysts believe it will still pay a full-year dividend of 4.4p. Given the current climate its shares are best avoided.
The Times
Drax Group, owner of Britain's biggest coal-fired power station, revealed yesterday that revenues are up 41%. 2009 is set to be another strong year, with 80% of this year's output already sold forward. But commitments to build new biomass plants means that only half of surplus funds will be returned from 2010. Side-effects of recession could cause the pot to shrink. Avoid
Revenues are up 6% at insurance brokers Jardine Lloyd Thompson, clear evidence it's taking market share from bigger rivals. But dwindling business activity in the private sector could have a negative knock-on effect. JLT has, however, a good grip on costs, only £9m of debt and organic growth that should mean double-digit gains in earnings. Hold
If low crude oil prices are bad for Rotork, there is no sign of it yet. The world's biggest maker of actuators disclosed a record £162m order book yesterday — up 31% year-on-year. And with about 80% of its UK output sold overseas, Rotork is a big gainer from a weaker pound. A growing cash pile of some £41m means there is room for further special dividends or ad hoc acquisitions. Buy
Whitbread, which owns the budget hotel chain Premier Inn, reported a sharp slowdown in recent trading yesterday, mainly due to a reduction in the amount of leisure business at its hotels as consumers reined in spending on short breaks. At 702½p, down 44p, or ten times next year's earnings, and yielding 5%, tuck away for the long term. Hold.
As sponsor of the Oxford and Cambridge Boat Race, March is usually the month when Xchanging grabs greatest attention. But the outsourcing specialist stood out for all the wrong reasons yesterday, when full-year figures pulled its shares down nearly 7% to a new postfloat low. Even so, 189½p, or 11 times current-year earnings, seems too steep a discount to Capita, given a strong cash position and the dynamics that they share. Buy.
The Daily Telegraph
Amlin. the largest of all of the Lloyd's of London insurers, has a market capitalisation of £1.6bn/ The group has reserves of £700m above regulatory requirements, including debt. As insurance brokers become increasingly cautious about who they deal with in the wake of former insurance giant AIG's troubles, Amlin will be well positioned to pick up business. Buy.
Goals Soccer Centres remains confident it is on to a winning formula, despite the recession. Goals is paying a small total dividend of 1.8p, up 20% on the previous year. Its latest numbers meant the group has enjoyed eight consecutive years of growth in sales and profits but the shares are still close to historic lows. Questor says buy.
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