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 the newspapers and magazines.
FRIDAY
The Times
Investec has managed to avoid big bets in structured credit and fall back on a usefully diversified income stream – private banking, asset management and investment banking in its native South Africa, the UK and Australia. At 313p, down 18½p, or nine times next year's earnings, buy.
Shanks Group
Shareholders in Shanks Group who were hoping for details of a £400 million PFI deal in yesterday's full-year results got something rather different: a deeply discounted £71 million rights issue and the scrapping of the final dividend. With PFI progress also imminent, the shares, up 8p to 99½p, or 13 times current-year earnings, have farther to run. Hold on.
The Daily Telegraph
Qinetiq shares have underperformed since their recommendation at 171¼ in December last year – and are languishing at about 15% below their recommendation price. Despite the shares recent underperformance, taking a long term view, the stance on the shares remains buy.
Investors Chornicle
Invensys has emerged from years of restructuring, with a leaner and more efficient business model only to face the toughest downturn in hi-tech engineering for 40 years. However with the prospect of dividend payments to support the share price, buy.
Thursday
The Times
De La Rue, the FTSE 250 banknote specialist, yesterday declared an above-forecast 92% rise in its full year dividend, after handing back £460m to shareholders last year after the sale of cash systems division. At 908½, or 12 times current-year earnings, and yielding 4.5%, the share should be locked away by long-term investors. Buy.
Care UK's problems were highlighted in an BBC 1 Panorama documentary earlier this month, the most devastating being stripped of a contract to provide home care to elderly people in Hertfordshire after it failed to cope with the transfer of the work from the previous providers. At 305p, or ten times earnings on Brewin Dolphin's estimates, avoid.
Shares Magazine
Game Group's shares now look set for a sharp correction subsequent to a short rise after the collapse of competitor Zavvi. At 178p the recent retreat from May's highs above 200p has much further to run and investors may expect continued weakness leading up and following that first-quarter trading statement due in July. Sell.
The metals producer, Central African Mining & Exploration company (CAMEC), has become a low risk investment after new commercial terms for mining in the Congo were approved after a drawn-out continuation. The shares are re-rating. Buy.
WEDNESDAY
The Times
Burberry is in the black – revealing a cash surplus for the first time since floating seven years ago. The sum may be modest (a mere £8m) but it's testimony to the clothing label's tighter control of working capitals and efforts to shift unsold stock. However, the clear-out has come at the expense of gross margins – down nearly 9 percentage points. Burberry may have a strong balance sheet but room for further cost cutting is limited. Hold.
Dairy Crest, owner of Cathedral City, has taken a knife to its dividend. Pretax profits announced yesterday are down 8% at £79.5m while current year-trading is running to plan. Sales of big cheeses and spreads such as Country Life and Utterly Butterly have notched up their second consecutive year of strong double-digit gains. Dairy Crest has worked hard to reduce debts but share prices are up with events. Pass.
The Telegraph
Shares in SSL International are expected to yield earnings of 42p a share by 2012. The company is building the biggest condom factory in the world in China and is expanding into Russia, Ukraine and Switzerland. It has increased its innovation budget and has recently launched a variety of new products. Good cash management has slashed net debt to just £17.7m. Buy.
Sales at Marks & Spencer fell by 5.9% which, combined with a weak share price, could present a good buying opportunity. But investing in the High St is dangerous at the moment with a depressed consumer economy and few signs of recovery. As one analyst put it, 2009/10 will be an 'earnings trough' for M&S. With Sir Stuart Rose likely to step down within the next two years, the retailer is at a crossroads. Avoid.
TUESDAY
The Times
Preben Prebensen, the former investment banker who now runs Close Brothers, has decided to sell the investment banking division and occasion which marks the company's first disposal in its 131-year history. However, at 636½p, up 8p, or 12 times current-year earnings, and yielding a solid 6%, a reinvigorated Close is a reasonable play on financial services recovery. Buy.
Russell Taylor of ITE Group has more reason than most chief executives to be grateful for sterling's weakness. At, 90¾p, or nine times next year's earnings, and yielding 5.8%, the shares are best avoided pending signs of greater stability in forward bookings. Avoid.
The Daily Telegraph
There was no mention of swine flu in the full-year results statement form pork processing group Cranswick. This is probably because the company believes it is irrelevant to its business. The shares are trading on a March 2010 earnings multiple of 9.7 times, which does seem too high, and yielding 3.8%. Buy.
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