Newspaper and magazine share tips

By This Is Money
Updated: 11:27 EDT, 18 September 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: All the latest newspaper and magazine share tips

FRIDAY

Daily Telegraph

Kier Group

With planned public spending cuts dominating the news, some companies are bound to benefit if the next government increases service outsourcing.

Kier Group could be one of them. The construction unit is confident that, having secured 50% of the contracts for next year's expected revenue already, and with plans for a move away from private house building towards social housing on the cards, the future is bright. Exposure to the energy sector is another positive as more power stations must be constructed if the UK is to meet demand in the coming years. Buy.

Rolls Royce

Some fantastic news for Rolls-Royce investors have helped its share price up this week, and long-term prospects appear sound. The group will be a major supplier to EdF Energy providing engineering and technical support at the UK's four new nuclear power stations. Despite the current optimism, though, short term prospects are limited and a investors should remain cautious. Shares have enjoyed a strong run, up 43% since January, but for now: Hold.

The Times

Unite Group

Unite, the student accommodation developer, has gone to the stock market to raise cash. The group hopes to raise £82m at 250p per share, and it hopes to expand in the London area where there is a shortage of student housing.

Land costs are at a low and Unite chief executive Mark Allan wants to take advantage, saying the objective over the next year is to buy up three years' worth of development land while prices are low, and deliver those from 2012 to 2014. Unlike those for commercial property, student rents are expected to rise about 10% this year. Buy.

Investec

Outperforming the banking sector as a whole this year, Investec has shown no signs stepping back. The portfolio of Kensington Group, the sub-prime lender it bought two years ago is beginning to benefit from stabilising UK house prices. Two thirds of profit are sourced from the struggling South African economy, but higher commodity prices and next year's football World Cup should help lift the country out of the downturn. Hold.

Investors Chronicle

Ashtead

Specialising in equipment renting, Ashtead is suffering an especially grim time as the recession bites. First-quarter figures look particularly bleak, and spending by US construction companies – Ashtead's biggest customers - has fallen this summer. With the Obama administration's $787bn stimulus package taking its time to filter through, things may take a while to pick up. And in the UK Ashtead's A-Plant operation saw turnover slip 29% year-on-year at the end of July, operating amid a struggling UK construction sector. Ashtead's markets look set to remain depressed for 18 months so: Sell.

Xchanging

Business outsourcing company Xchanging looks well placed to capitalise on the growing number of firms looking to foreign fields for their businesses. The long-term nature of Xchanging's contracts means that a high proportion of revenues are already secured. And having won a significant number of new deals in the year to date - including a £825m agreement with Alexander Mann – Xchanging is moving away from tactical cost-cutting to improving its back office solutions. Shares are undervalued and are worth holding onto for the long haul. Buy.

THURSDAY

The Times

Weir Group has got off lightly with just a 3% drop following news chief executive Mark Selway is heading for the door. Selway is credited with transforming Weir from a diversified maker of pumps and valves into a company focused on a clutch of high-growth markets – minerals, oil and gas, and power generation. His successor Keith Cochrane promises more of the same. At 678p, down 20p, or 15 times next year's earnings, this is no time to sell out. A solid hold.

AIM-listed European Climate Exchange's volumes of exchange-traded products have more than trebled in the six months to 30 June, up 252% in London. This is all the more impressive as volumes have fallen across the world. Shareholders in the screen-based carbon-trading bourse have little cause to complain. But at 880p, or a stock market value of £420m, more than 80 times this year's forecast pre-tax profits, the shares already discount stellar growth. There should be better times to buy.

Tenon might seem better suited to recession than recovery. The firm's objective is corporate restructuring and recovery – handling the affairs of mostly private companies in administration, liquidation or voluntary arrangements. Full-year profits announced yesterday show an increase of 7% as sales rose from 11% to 12.6%. It predicts April's planned introduction of the 50% rate of income tax should bring a flurry of work. These shares have further to go. Buy.

Daily Telegraph

Cape provides maintenance services that are essential at all times, despite the recession. Power stations still need to be cleaned and maintained, as do oil and gas-pipe networks. Cape's exposure to capital expenditure is fairly low and Wednesday's results were very good, thanks to cost-cutting measures and currency effects. Pre-tax profits for the full year are expected to be £5m higher than expected. With a order book which has grown by 48% since the year end, it's a buy.

Hilton Food Group produces lamb and beef roasting joints and value ranges for supermarket groups such as Tesco. Volumes have increased by 9% and half-year pre-tax profits are up from £9.7m to £10.4m. Sales grew by 51% in the region to £31m as customers down-traded to cheaper brands. Net debt is down so the balance sheet is strong enough for the group to be able to cope with any acquisition opportunities should they arise. Buy.

Shares Magazine

Zinc mining and recycling firm ZincOx is seeking to build a processing plant in Belgium to produce a high quality product for the European rubber industry. It all hopes to sell zinc oxide to the paint and ceramics industries. Trading at 409p two years ago, shares have since fallen sharply amid the commodities and credit crises, hitting a trough at 25.5p in November 2008.Even though recovery is now underway, there is still considerable upside potential for investors. Buy.

The revelation by recruitment consultants that banks have started to hire new staff is good news for training specialist ILX Group. One of its two operating divisions specialises in training investment banking staff was hard hit in September 2008 by the collapse of Lehman Brothers. A recent run of contract wins would suggest ILX is well placed to rebuild its earnings momentum. Investors should follow chief executive Ken Scott's lead in buying shares – he picked up 10,000 shares at 33p this month. Buy.

WEDNESDAY

The Daily Telegraph

Growth in food demand over the next 20 years is underscored by important fundamentals. One FTSE 250 company that is ideally positioned to make the most of these long-term fundamental drivers is Genus. The shares are a buy based on the recovery of the US diary market, its expansion plans and the unstoppable trend of increasing demand for food.

The Times

Despite a move towards renewable energy and nuclear, coal is still vital to the UK economy and it is likely to remain to be for quite some time. Hargreaves Services posted exceptional results yesterdays and there shares are now 19% ahead of the initial recommendation. Buy.

TUESDAY

The Daily Telegraph

The biotechnology sector has always been a high-octane environment for investors; while investors should be cautious there are phenomenal gains to be made. Shares in Antisoma are a speculative buy, so investors should take this into account when they are deciding how much they should invest. Buy.

The latest results from South Africa's International Ferro Metals (IFM) are not really relevant to the company's future – it's next year that is important. The shares are just a notch above Questor's initial 56.5p recommendation price. Buy.