Newspaper and magazine share tips

By This Is Money
Updated: 12:26 EDT, 27 March 2009

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.

Tips: Get the latest newspaper and magazine share tips.

FRIDAY

The Times

Hedge fund managers Man Group says net cash has risen to $1.6m but the rest of the numbers in yesterday's year-end trading update were less impressive. Pretax profits for the 12 months to 31 March are likely to plunge 43%, while assets have fallen by about 36%. Man is taking action. Overheads are being cut by about 15%, which means the loss of 270 jobs. But with a strong balance sheet and shares look anomalously cheap. A buy for the brave.

The UK's largest listed water supplier, United Utilities, is in an enviable position. It remains on track to meet full-year profit forecasts of £500m and has sufficient funds to finance capital spending commitments until the middle of 2011. Chief executive Philip Green is improving efficiency but the company needs to raise about £2.5bn to meet spending plans. Shares priced at 496½p, providing a 6.6% dividend yield means they are worth holding.

Advertising agency M&C Saatchi is using the recession to extend its international reach. With low start-up costs, the company has entered Brazil and Switzerland and plans to expand in America. With clients wins such as the Department of Health, Westfield and bmi, M&C is not feeling the squeeze on budgets and fees that is afflicting its wider sector. It expects revenues to fall around 6% this year but costs are being cut in line. It remains agile and financially sounds. Buy.

The Telegraph

Agro-technology group Plant Health Care's shares have fallen significantly since this time last year. Because the group is loss-making, its cash position is very important. Cash at the end of 2008 had fallen to $7.3m from $10.8m at the end of 2007, and further declined to $4.5m by the end of February. The group is likely to continue to burn cash for some time, but long-term prospects look good. Hold.

Investors Chronicle

Scottish & Southern Energy has steadily grown its number of domestic customers from 5.5m in 2004 to just over 9m today. It has maintained a competitive advantage by passing on price cuts quickly. Management also expects to deliver a 'modest rise' in adjusted pre-tax profits for the year and promises at least 4% real growth in dividends for 2009-2010, which should reassure nervous investors. Buy.

Service office space provider Regus saw strong full-year results with revenues up a quarter and a bigger-then-expected cash pile. But falling occupancy and prices in the final two months of 2008 has put pressure on revenues, with few reasons to think it will easy any time soon. The group is trying to address the slump with 'recession-busting' products, which are working to bring in new customers but it could be some time before things pick up again for Regus. It's time to vacate. Sell.

THURSDAY

Daily Telegraph

Eurasian Natural Resources has a lot going for it, with $1.7bn in cash on its balance sheet and potential acquisitions in the pipeline. The strong cash position means the group should be able to continue paying a dividend until market conditions improve. The shares are trading on a prospective December 2009 dividend yield of 3.2% and earning multiple of 10.9 times. Hold.

Structural steel group Severfield-Rowen had an excellent 2008 but investors are concerned about the group's prospects for this year and beyond. The company has generated almost all of its revenues from the UK in the past two years and this market is definitely not going to improve soon. But it plans to boost business abroad, increasing revenues from outside the UK to around 30% of the total. Remaining cautious, the shares are a hold.

The Times

Far from suffering any decline in demand, TUI Travel reported narrowing first-quarter losses, an improvement in booking levels over the past four weeks and a £25m increase in its synergy target to £200m. Chief Peter Long has an ace up his sleeve: by cutting the number of holidays, he can keep a grip on price rather than having to shift excess packages on the cheap. Shares are a hold.

WEDNESDAY

Daily Telegraph

In 2007, Ferraxpo became the first Ukrainian company to list on the London Stock Exchange. It recorded a 34% year-on-year slump in production in February, and there is no doubt that this is a very difficult business environment at present. But the company's debt position looks pretty manageable. As costs will plunge this year, the group should be able to successfully 'hibernate' through the economic storm. Shares are a hold.

BG Group's Australian liquefied natural gas (LNG) operations are unlikely to come fully on steam until around 2014 – when demand is expected to surge once again. The company expects global LNG production to more than double by 2020. Shares go ex-dividend on April 8 so new investors can still lock in last year's final payment but the yield is not spectacular at 1.2%. Despite this, BG has a core long-term energy holding and shares remain a buy.

The Times

Since the Ministry of Defence sold its remaining 19% stake last September, shares in defence electronics group QinetiQ have fallen by more than a third. The spectre of tightening US defence expenditure and troop withdrawal from Iraq has raised fears over demand for its gadgetry. And QinetiQ's US acquisition spree – it has bought 14 companies in four years – has left it with net debt of about £600m. At 139¼p, or eight times next year's earnings, the shares trade at a discount to a recently depressed defence sector. Buy.

TUESDAY

The Times

Shares in Wincanton may have fared better than those of Uniq, the food producer from which it was demerged, but that can be little consolation to investors in the small-cap logistics group: down 57% in the space of a year. At 150p, or six times next year's earnings, avoid.

Is it a case of no news is good news? Hogg Robinson, the corporate travel specialist, is not scheduled to update the City before March 31 – and appears to have no plans to do so. However, Hogg was floated with too much debt by Permira, the private equity group, and despite strong cashflow and the cancellation of its payout, its borrowings – twice its stock market value – are set to remain stubbornly high. At 17p, or less than four times next year's earnings, avoid.

The Daily Telegraph

Vedanta, the Indian-focused miner does have some debt, but there are no significant refinances due in the near term. The shares are trading on a forward (2009) earnings multiple of 9 and yielding 3.7%, which does not seem stretched because of the group's strong cash position. For these reasons, shares in Vedanta, which are up around 25% since their initial recommendation on December 4 last year, remain a buy at these levels.

Templeton Asset Management shares were recommended at 284p, so they are around the same level now as when they were recommended – after falling below 250p. Questor believes investors with a long-term view should have a holding in companies such as these. Buy.