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.
Tips: Read all the latest share tips from the newspapers and magazines.
THURSDAY
The Times
Cranswick, the Hull-based food producer, is doing its best to maintain regional pride. A week after saying that figures would beat forecasts, Cranswick has bought, for £17m, Norfolk-based rival Bowes. It will take Cranswick's market share to between 15% and 20% and diversifies it's customer base, which has been dominated by Sainsbury up to now. However, at 608½p, off 3½p, or ten times earnings, and yielding 3.5%, there is a clear risk that the shares get left behind as investors seek stocks more exposed to recovery. No more than a hold.
Having more than trebled in the space of three weeks, shares in Afren, the West African-focused oil explorer, were vulnerable to profit-taking. It's shares suffered a 12% dip after admitting exploration pans were 'subject to financing'. With analysts estimating that the exploration will cost around £100m, Afren falls into the category of a junior explorer with promising reserves but insufficient funds to exploit them. At 37p, down 5p, first-time buyers should wait until its funding plans are farther advanced. Pass.
The Daily Telegraph
After rallying at the end of 2008, the market has been downbeat on defence sector but Robert Gates, the US Defence Secretary, has given the markets some clarity. The most significant aspect of the review is that the F-35 joint strike fighter programme – with components provided by BAE - will not only remain intact, but will actually be accelerated. Unless you predict that world tensions are going to ease significantly over the next 10 years as we enter a period of global détente, the shares are a definite buy at these levels.
Waste and recycling group Shanks, which handles 2.8m tonnes of waste in the UK each year, has managed to agree a refinancing, which has eased debt concerns. The fact that the company has not only managed to renegotiate facilities, but it has increased them significantly is a reassuring sign. The group has some long-term earnings streams and, in normal times, earnings are pretty predictable. So, with one eye on the yield, which is covered by earnings 1.8 times, buy.
Investors Chronicle
It's not a great time to run a pub. But there is a big difference between pub groups with too much debt and too many low-quality pubs, and the groups with high-quality estates and sound balance sheets. Fuller, Smith & Turner is firmly in the latter camp. The recession is hitting rivals hard and Fuller, Smith & Turner has been able to use its balance sheet to acquire some top-quality premises at knock-down prices. A buy.
Sub-prime lenders aren't exactly in fashion by Provident Financial is showing how lending at the sharp end of the market can still be profitable. It is coping with the key concern of the sub-prime sector – keeping bad debts down – and impairment levels in 2008 as a proportion of revenues stood at 30.4% - hardly any higher than 2007's 29.7% There are growth plans in place and 21 new branches have been opened. Buy.
TUESDAY
The Times
Shares in Afren, the West African focused oil explorer, were vulnerable to profit taking as the company has more than trebled in space in three weeks. That Afren has started producing oil from Nigeria within two years from a standing start is testimony to its ability to move fast. However, at 37p, down 5p, first-time buyers should wait until its funding plans are farther advanced. Pass.
The two-thirds collapse in operating profits at Adnams, the family-controlled Suffolk brewer listed on Plus Markets, should not surprise. Despite a mini-revival of cask ale the company still has to costs to cut, especially after the purchase of a clutch of Suffolk pubs from Punch Taverns. Avoid.
The Daily Telegraph
Shares in Dana have risen 30% over the past month – but shares are still well below their highs last year of £19.72. On current forecasts, the shares are trading on a December 2009 earnings multiple of 25.2 – which is undoubtedly high – but this falls to 14.6 in 2010 and 7.3 in 2011. With a strong balance sheet, an exciting drilling programme and strong production upside, the shares are a buy at this level.
The acquisition of Bowes of Norfolk by pork producer Cranswick can only enhance its earnings and increased presence in Tesco stories. The shares were recommended as a buy at 580p last November and again in January at 600p ahead of the TV campaign launch by Jamie Oliver, the celebrity chef. Following this strategically sensible purchase, Questor once again says buy.
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