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: We round up the latest share tips from newspapers and magazines.
FRIDAY
Daily Telegraph
National Grid has delivered on its promise to raise dividends by 8%, and has confirmed its progressive dividend policy out to 2012. A prospective yield of 6.6% makes now a great time to buy shares and a grab a potential payout of 61½p in the next 15 months. With profits down just 3% in the year and a predicted strong performance to come, National Grid shares look like a good buy.
SABMiller's dividend looks secure and the introduction of a series of price increases in the latter part of last year should lead to benefits in the current period. But there was a hint of caution in the brewer's full-year results statement yesterday. The company is expected to scale back investment and cut costs because of weaker demand. This moves the stance on shares from a buy to a hold.
Investors Chronicle
Carpetright's vulnerability was revealed at the end of last month when a trading update reported sales had slumped 15%. With a collapsed housing market, sales of new carpeting have gone the same way. Profits at Carpetright won't be helped by a growing debt pile either. Net debt had reached roughly £95m by the end of April. Although it occupies a dominant slot in the UK's floor-coverings market, Carpetright is facing tough trading conditions. Sell.
The Government's fresh efficiency drive is great news for outsourcing company Capita. Their business model is built on taking on the tasks of both public and private organisations at a lower cost. Central Government accounts for only 10% of Capita's current revenue but momentum is building in this market. With strong cash flows and acquisitions in the pipeline, Capita's shares provide a level of stability. Buy.
The Times
Rivals such as Regent Inns and Nexum Leisure may be looking the worse for wear but Britain's biggest nightclub operator Luminar seems no more than mildly tipsy. Their target market of 18 to 24 years olds are still splashing out on night outs, despite the slump which means admissions are up 3.2% in the past nine weeks. When the recovery starts Luminar, up 6¼p at 133p, or less than seven times forward earnings, will sober up faster than the competition. Hold.
THURSDAY
The Times
The commercial property sector – which by last week had rallied 64% from its March low – is suffering, too. Land Securities yesterday provided a reminder that although balance sheet fears have, the pressure on rental income is starting to show. At 468p, down 71p, or a 6% discount to Cazenove's estimate of next year's net asset value, the shares are up with events. Avoid.
VT Group yesterday demonstated the strengths of a support services business based on long-term contracts in government and defence. Revenues at the former Vosper Thorneycroft rose 30%, or 13% on an underlying basis, with pretax profits up an above-forecast 41%. At 478p, up 28¼p, or 12 times earnings, buy.
The Daily Telegraph
Shares in VT, the former Vosper Thornycroft ship-building business, have lost significant ground since it was tipped by Questor back in January. According to USB forecasts, the shares trade on a modest multiple of 11 times 2010 forecasts which is cheap for a cash-rich defensive stock with strong growth prospects. Buy.
Wednesday
The Daily Telegraph
Babcock International, the engineering services company, seems to be thoroughly enjoying the economic downturn after reporting a 22% rise in revenue to £1.9bn and a 26% increase in pre-tax profits to £106.7m. With Arbuthnot and KBC Peel Hunt setting a target price of 550p to reflect continued growth this year, the engineer still looks undervalued. Buy.
Shares in the UK's leading housebuilders are all in positive territory for 2009, with Taylor Wimpey rebounding from last year's annus horribilis to the tune of 251%. The market in which they operate in is still under pressure and, although there is more hope than last autumn, investors should wait for more foundations to be laid. Hold.
The Times
Dividend cuts are normally accompanied by double-digit share price gains, but the Stobart Group, is used to going against the flow. The company's extension plans might unsettle at a time when rivals are trenching, but at 107p, up 9¾p, or 12 times next year's earnings, hold on.
TUESDAY
The Times
Despite swine flu fears TUI Travel, the Thomson and First Choice operator, said yesterday that bookings to Jamaica were up 30% in the past two weeks, with Egypt up 23% and the Dominican Republic up 19%. The main doubt about TUI Travel is the intentions of TUI AG, its German 51% shareholder. The uncertainty is unhelpful, but does not detract from the improving trading outlook. Hold.
RM Group, the educational software and services provider, won top marks for its homework yesterday. On the face of it, broadly flat half-year pretax profits of about £200,000 hardly constitute a top-of-the-class performance, but what the market liked was the 21% rise in sales to £141.9 million – comfortably ahead of expectations. Buy.
The Daily Telegraph
This time last year everything looked rosy for Lonmin, the South African focused precious metals miner. Since the financial crisis the demand for new cars has all but disappeared. The rise of the electronic and hybrid cards looks set to dent Lonmin's long-term ambitions. Sell.
About 60% of HSBC's profits come from Asia, an area which is still relatively untouched by the economic crisis. Its core tier-one capital ratio, the key measure of financial strength, remains among the world's best at 8.6% HSBC is not without risk, but could reward well. Buy.
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