US Edition H&T Group
Charles Stanley rates the pawnbrokers a buy at 198.5p, with a price target of 275p.
In an upgrade to forecasts after the recent AGM, the broker said trading in the year to date was ahead of expectations, mainly as a result of the sustained high gold price and relative strength of the US dollar.
"The high gold price benefits the group's auctions, scrap and gold purchases. It also helps compensate for any weakness in retail or in redemption rates, although we expect the former to be resilient and the latter to have remained not far off 80pc on established stores," Charles Stanley said.
"However, we also expect demand for underlying pawn loans to remain strong with the reduced availability of credit and pressure on household liquidity driving the pledge book and new customer growth."
For the year to December 2009, the broker is increasing its forecasts for profit before tax by 12pc to £13.4m, from £12.0m previously. There was further upgrade potential should the second-half gold price and pound to dollar exchange rate remain similar to those enjoyed in the first half to date, it said.
"H&T's shares trade at a discount of about 30pc to Albemarle & Bond. We reiterate our buy recommendation and increase our target price to 275p from 250p previously."
Centaur Media
Hold at 31p, Charles Stanley said, setting a price target of 30p
The company said trading was in line with expectations. "The board is looking forward to recovery – having taken out a lot of costs, the board believes that it is well placed for recovery. Centaur is highly operationally geared and profits will move quickly should there be any return to growth."
The broker returned its recommendation to hold from buy. "We moved to buy with the shares below 20p in anticipation of a levelling off of trading, with the market then able to look at recovery. With the shares now on a price to earnings ratio of 13.7, that is now factored in and we return to a hold stance."
Huntsworth
Hold at 56p, Charles Stanley said, with a price target of 55p.
Huntsworth recently said trading was in line with expectations. "The group has visibility over 83pc of full-year expected revenues, which is in line with the level seen this time last year," the broker said.
Margins are said to have held up well with signs that they may improve later in the year. Health care has seen double-digit organic growth, Huntsworth indicated.
"We had been expecting this to show through in the second half of the year," Charles Stanley added. "Our discussions with the chief operating officer indicate that further recent wins of large mandates will have a more noticeable effect on 2010."
With positive share price movement throughout the sector, there was scope for an increase in target price (55p from 48p), it said, but retained its hold recommendation.
ProStrakan
Buy at 76p, Charles Stanley said, with a price target of 126p. Revenues were growing faster than its forecasts, it said, and new products were progressing well.
"The pharmaceuticals company said recently that product sales were up 40pc, driven in part by pan-European new products, which grew by 50pc. Adcal, which is sold only in the UK and was subject to a 3.9pc price decrease under the Pharmaceutical Price Regulation Scheme, posted an impressive sales gain of 20pc.
"The US Sancuso launch is continuing well, with average weekly sales of 850 patches (up from an average of 500 a week in March). This current run rate suggests annual sales of $12m but the growth implies that our full-year target of £14.6m is too low.
"The company confirmed that it remained funded through to break-even. This is now confidently expected in late 2009.
"Our buy rating is maintained and our 126p price target is based on conservative assumptions. The management continues to deliver on its promises and the company's transformation into an international speciality pharmaceuticals player is now well under way."
System C
Buy at 43p, Charles Stanley said, with a price target of 55p.
The brokers said: "System C has won a significant contract for the provision of clinical intelligence systems (effectively dashboards that provide vital medical indicators) for a dozen trusts across the entire NHS in England.
"In financial terms, the deal is for software and service and is the equivalent of the first year of a Patient Administration System – the bulk of the revenue will fall in full-year 2010 and underwrites our forecasts for that year.
"There are a number of important strategic benefits: System C's software will be in situ in each of the NHS regions in England, improving the company's profile at this important phase of NHS IT buying, while this is the first major win for Medway Sigma, beginning to repay the company's significant research and development investment.
"The provision of the system is also strategically important to Connecting for Health, which has made much of the provision of better data to clinicians to improve patient care. It further cements System C's relationship there.
"As stated earlier, this deal underwrites the 2010 forecasts and therefore we are not moving our forecasts yet. It does, however, materially increase the potential for upgrades should the company win further contracts or should this contract be extended to further trusts.
"We maintain our buy rating and 55p price target."
Best of the Best
Hold at 24.5p, Charles Stanley said, with a price target of 25p.
In a pre-close trading update, Best of the Best, which operates car competitions at airports, said trading for the year to April 30 2009 was in line with expectations.
The broker said: "We are forecasting pre-tax profits of £0.5m, earnings per share of 2.9p and a final dividend of 1.0p, putting the shares on a price to earnings ratio of 8.4 and offering a yield of 4.1pc.
"The company has confirmed that it has ended the year with strong cash balances; we are forecasting about £1.5m, equivalent to about 50pc of the market capitalisation.
"As previously highlighted, trading during the month of September was disappointing but since then trading conditions have held up well against a backdrop of falling UK airport passenger numbers.
"We expect online sales to have been relatively resilient; they account for about 25pc of total sales. For the year to April 2010 we are now forecasting revenues of £7.4m, profit before tax of £0.6m, earnings per share of 3.6p and a dividend of 1.0p.
"Ahead of the full year results expected on July 23 we retain our hold recommendation and target price of 25p."