Sunday newspaper share tips

By This Is Money
Updated: 08:43 EDT, 12 September 2010

We round up the Sunday share tips from Financial Mail, The Sunday Telegraph and the Sunday Times.

FINANCIAL MAIL'S MIDAS

Sinclair Pharma (27.25p) produces products such as acne cream, cures for athlete's foot, eczema relief and burn products, as well as a host of other treatments for skin and mouth problems.

Sinclair had focused on Europe but is keen to expand into emerging markets, where demand for skin products is soaring.

Sinclair was consistently profitable for the first time ever in the second half of its financial year and continued to make progress over the summer.

For those prepared to have a bit of a punt, Midas says the shares are a buy.

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SUNDAY TELEGRAPH Shares in Peru-based silver miner Hochschild Mining (390.5p) hit a two-year high on Friday after the company increased reserves at one of its projects.

The company has a 30% stake in the Inmaculada mine and Hochschild said the new resource estimate represented a 245% increase in gold ounces and a 225% increase in silver ounces, compared with the previous resource estimate.

Hochschild is targeting total production of 26.3 million ounces this year and has an exploration budget of 50 million US dollars, 42% of which is earmarked for exploration at the company's existing mines and 58% at new greenfield sites.

The group's shares have also been boosted by the resurgent silver price, which looks like it may have further to run. Trading on a December 2010 earnings multiple of 22.7, falling to 14.1 times next year, the shares are trading at a discount to FTSE 100 rival Fresnillo, which is currently on a 2010 earnings multiple of 29.5 falling to 23.5 in 2011.

Buy, but any pullback in precious metals prices could hit the valuation hard.

Mozambique-based titanium group Kenmare (20.75p) will enter the FTSE 250 this Friday. This is good news as tracker funds will now pile into the shares, which have risen 11% in one week.

Supplies of titanium are expected to be lower than demand by 2013. The company moved into profit at the interim stage, and the group's processing plants are working at full pelt. The group also has all the financing in place for its expansion plans.

The shares are trading on a December 2011 earnings multiple of 27.6. However, the production ramp-up means the multiple hits 6.9 in 2013. The company is not paying a dividend, so the investment is not suitable for income seekers. Buy.

THE SUNDAY TIMES

This week The Sunday Times looks at Dana Petroleum, the North Sea oil explorer.

For the past three months Dana has been fighting off the advances of KNOC, Korea's national oil giant, and last week things got to the last ditch stage.

KNOC had previously pushed its takeover bid under the noses of shareholders and 49% had made positive noises. But the Dana board said that KNOC's £18 a share offer wasn't up to scratch.

And Senergy, the valuer, last week found that Dana was worth at least £22.70 a share when its North Sea fields bought from rival Suncor were taken into account.

Surely investors would demand the Koreans pay up? Or not. Richard Buxton at Schroders, Dana's biggest investor, said the report didn't change his view 'one iota'.

Why? A loss of faith in Dana founder Tom Cross who refused to recommend the offer, a difficulty in accepting an 'aggressive' report, and what The Sunday Times calls the Suncor discount (the assets could be worth less than expected) has left investors sceptical.

It means that Dana could be worth as little as £14.80 all considered.