Newspaper and magazine share tips

By This Is Money
Updated: 06:06 EDT, 10 September 2010

Each day we round up share tips from national newspapers and investment magazines. For the Mail on Sunday's stock picks, read the Midas column.

Round-up: Latest share tips from the national newspapers and investment magazines

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FRIDAY

Shares Magazine

Auctioneer GoIndustry-DoveBid is seeing a turn of things. Despite low growth in 2009, things are looking up. Its market value now is £7.6m, and it has a one-month relative strength of 5.8%. With its shares priced reasonably, buy.

Oil and Gas producers Petroceltic International, is rising above. Though its shares have fallen by 42% from a 12-month high in 2009, its stock is expected to return to higher levels, with a potential 72% return. Its market value is at £216.2m, buy.

Investors Chronicle

Asset rental group Lavendon is going through a tough phase. The first half of 2010 has been grim with revenues falling. Its full-year pre-tax profit estimate has been reduced by 28%, and by 15% for next year. Its price to earnings ratio is quite high at 10 times for a company with a bleak outlook. Sell.

Cannabis-based developer of medicines GW Pharmaceuticals is looking positive. Its turnover so far for this year is at £28.9m with pre-tax profits of £2.5m. With the price of its shares falling to a reasonable price, buy.

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The Daily Telegraph

The revenues of Genus have increased by 2%, and its pre-tax profits have jumped 56% to £40.8m. The company provides animals – bulls and pigs – with superior genetics as compared to current livestock, and is trading on a high. The company has set a target of increasing its earnings per share by 12% to 14% each year from 2011. The shares are currently yielding at 1.7%, and keeping in mind the bull market for food production, buy.

Spread-betting company IG Group has shown positive results, but is cautious about its future trends. Revenues rose by 16% to £79m in the quarter with good results in Britain, Australia, Singapore, US and parts of Europe. With last year's dividends being 18.5p, it yielded at 7.3%. Hold.

The Independent

Housebuilder Redrow's shares are looking over-priced. The group has said that its pre-tax profit was £700,000, which is slightly encouraging to the markets. But all is not well for the company. Despite the improved figures, lack of mortgage finance is still a major hurdle. For the time being with its highly priced shares, avoid.

Producers of leather Pittard's fortunes are linked to consumer demand for leather products like gloves and shoes. Its stocks are trading on multiples of less than eight times forecast earnings for 2010, falling to 5.6 times in 2011. Though this does not bode well for Pittard, the economy isn't dead yet. So its shares are a speculative buy.

The Times

Suppliers of engineering components, Premier Farnall is doing well. Its gross margins have risen by 1.2% points year on year to 40.8% in the second quarter. Its sales in the second quarter too were up by 30% to £252m. The shares are selling on a multiple of about 15.5 times this year's earnings and yield at 4%. Buy.

Home Retail Group, owners of Argos and Homebase, has seen its shares fall by 3%. Sales at Argos declined by 6.5% in the first half, with the second quarter seeing an improvement with sales going down by 5%. Homebase sales were down by 0.8% in the first half, and flat in the second. The shares are yielding a dividend of 6.6%. Hold.

THURSDAY

The Daily Telegraph

Shares in Cape, the energy and mineral services group are giving good results. Over the six months to June, its revenues reduced by 0.1%, while its pre-tax profits rose by 27.6% to £34.3m. Its cash inflow has been good as well, and it managed to reduce its net debt by 37.2% over 2009. Continuing the good news - the company will be paying a dividend this year, after nearly 10 years of absence. The shares remain under-valued though, so it's the best time to buy.

The Independent

With people's fondness for chocolate, one would expect the chocolate business to be thriving. But chocolatier Thorntons is facing trouble. Its revenues were flat for the year ending June 26 at £216.4m, and its pre-tax profits fell 2.4% to £6.1m. Despite strong sales in its commercial arm and its internet business, its main concern is with its Own Stores business where sales fell. But Thorntons are confident to perform better over the next few months. So for now, its shares are a hold.

Alliance Pharma is an Alternate Investment Market-listed company which makes its money by distributing, buying and marketing licensed prescription medicines. And it is doing extremely well! Its first-half profit increased by 166% and the company has provided a strong outlook for the rest of the year. Though its share prices are slightly high at a 2011 forecast multiple of 12.2 times, and it has a comparatively low yield of 1.2%, it is still a good pick to invest in. So Alliance Pharma is a buy.

German software testing group SQS posted its half-yearly results yesterday, with its pre-tax profits down to £1.9m as compared to £2.2m last year. But higher profits are being expected, as are better returns for investors. Its revenue has increased by almost 9.5%, and its stock price is not very expensive, with a yield of 4.8% expected by 2010. So for now, its shares are a buy.

The Times

House builders Barratt Developments have had some tough years due to the global recession. But things are becoming better for Britain's house builders. Its operating margins have improved from 2.4% over the last six months of 2009, to almost 6% during the first half of this year. Its selling prices too have gone up by 17.8% over the second-half of 2010. Not just that, its full-year operating profits have trebled to £90.1m from £34.2m. But with no dividend, and a poor housing market, investors still feel negatively towards to company. So its shares remain on hold.

On the other hand, Lupus Capital, supplier of building products solutions, is showing better signs. Its operating profits have jumped by 43% to £17.3m by the end of June. Its share prices which was at 17.5p at the start of the year, has increased by almost £1 over the months. But the company has warned that its second-half performance will not be as good. So it's time to rake in the profits and sell.

WEDNESDAY

The Daily Telegraph

Ashtead, supplies equipment to carry out construction work – be it trucks and diggers, or drills and generators. Things have been looking up, despite a weak economy. The company reported a 70% rise in pre-tax profits over the three months ending July to £14m. Sales are up by 8% and their net debt has declined. The shares are trading on almost 53 times April 2011 earnings, and their yield is 3.3%. A definite buy.

Hotel and coffee shop owner Whitbread is showing highly positive signs. Its share value rose by 54% last year, and this year it is looking to expand its Premier Inn and Costa operations. Whitbread's sales rose by 14% in the first half of the year, and it saw its revenue go up by 7.9%. In 2010, its shares are trading at a price-to-earnings ratio of 14.2 times, and a yield of 2.7%. A certain buy.

The Independent

Retailer Sports Direct has been having a good time. Its first quarter results saw its gross profit increase by 17.8%, to £185m. Sales too have seen a hike by 8.8% to a total of £408m. Though its shares are trading on a low 2011 price-earnings ratio of 6.7 times, the forecast is that they are worth the risk. Its pre-tax profits are expected to rise over the next two years, as are its dividends. But for now, it's a buy.

Dechra Pharmaceuticals, the veterinary products group, is seeing a boost. Its profits for 2010 have jumped by 11.9%. Though investors are looking at Dechra highly cautiously, its yield is quite reasonable at 2.4%. Despite its shares trading at price-to-earnings level of 12.7 times, Dechra is a company that cannot be ignored. Its shares remain a buy.

Pub retailer and brewer, Greene King, posted its results yesterday, showing a rise of 8.6% in the like-for-like food sales during the 18 weeks to September. With sales of ale falling throughout the market by 8%, Greene King's performance was better than its competitors. With a number of setbacks expected in the future, in terms of rise in VAT, and austerity cuts, the company has remained positive of a larger market share in the coming year. But for now, its shares are a hold.

The Times

DS Smith, the packaging company, is on the verge of changing its focus. Being low-margin makers of paper, their dividends were as high as 9% at one stage. But things are going to change now, with focus on making the company a high-margin one, and to reduce cyclicality. At present, the shares are trading at 9 times this year's earnings, and have a yield of 3.4%. So, the suggestion is to hold.

TUESDAY

The Daily Telegraph

The UK's largest pharmaceutical company, GlaxoSmithKline is going through a troubled phase. Its diabetes drug Avandia came under fresh scrutiny due to its links to heart problems. Since the news in 2007 of the drug causing a greater risk of heart problems, sales of Avandia have dropped from £1.4bn in 2006 to £462m last year. However, GSK has showed stable dividends and has growth prospects in emerging markets. With shares trading on 11.8 times 2010 earnings and a yield of 4.7%, it is a buy.

England's dismal performance in the World Cup has not created a dent in the growth of Goals Soccer Centres. Though the start of the year was on a lower scale with first-half profits falling by 30%, and profits falling by 3%, the full-year results are expected to be within market expectations. Pre-tax profits of £9.3m are forecasted for this year, up from £8.67m last year. The company has also maintained its first-half dividend at 0.675%. With its price-to-earnings ratio being 9.53 times, it's a definite buy.

The Independent

EasyJet may not seem very positive with investors having seen the value of their investments drop by more than 600p-a share towards the end of 2007. But things may be looking up. EasyJet has seen its passenger traffic increase by 8.4% last month when compared to August last year. With a forecast multiple of 15.4 times, EasyJet's prospects seem upbeat. No buying, but it's a hold.

IT company Kofax, is doing well. The first half of 2010 saw a 36% increase in pre-tax profits to £10.6m. They're turning things around in the hardware department, but are cautious about the growth of their software department. Six months back, it was a hold. But today, it is time to rake in the profits. It's a sell.

The Times

Telecoms giant Cable & Wireless Worldwide gets almost three-quarters of its revenue from fixed-line telecoms in the UK. Share prices collapsed in July after a profit warning, but the prices spiked last week with many investors short-selling their shares. With the company's shares yielding more than 6%, it is time to lock in profits and sell.

Clapham House, which runs the Gourmet Burger Kitchen chain, has its trade going flat. Its sales are down by about 1 to 2%, which is not good, but is in fact better than the estimated 10% fall in sales. But Clapham House is expanding its operations, and news about an offer from Capricorn Ventures International is in the air. Capricorn is thought to have offered 69p per share, which is considered low by GKB. Also no other company can make a bid as it would only be blocked by Capricorn's higher bid. All that GKB can perhaps hope for is an offer of 73p to 74p. Hold.