Sunday newspaper share tips
We round up the share and investing tips from the Sunday newspapers.
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Sunday Telegraph
Shares in infrastructure services group May Gurney (206.25p) have been hit hard by worries over austerity cuts. But the company said last week that its full-year results would be at the top end of the expected range and more than 95% of its business is on long-term contracts.
Last week, it said trading in the first half had been strong and it had secured a number of new contracts. These include contracts with North Yorkshire County Council to manage 17 household waste recycling centres, worth up to £24m, and one with Oxfordshire District Council for waste and recycling collections, worth up to £37m.
The group's order book stands at £1.4bn and management says it has a healthy pipeline of sales opportunities in core markets - worth in excess of £4bn. The company has no long-term debt and had just under £30m in cash on its balance sheet at the end of March. This represents about 20% of the group's current market capitalisation.
The company has already cut a number of staff on sub-contracted work to make managing any cuts easier. Buy.
Shares in miner Anglo American (2,726p) have underperformed due to worries over South Africa, where the bulk of its business is based, about potential nationalisation. There has also been a delay at one of its growth projects. But these fears have been overdone.
The group does have some growth coming fairly soon - and commodity prices are expected to remain high for a number of years.
Its Barro Alto nickel project in Brazil is expected to start production in the first quarter of 2011, with the Los Bronces copper expansion in Chile due to start production in the latter part of next year. Developments at a further growth project - the Kolomela iron ore mine in South Africa - are ahead of schedule and it is expected to start production in the second quarter of 2012.
The shares remain a long-term play on high commodity prices. Buy.
Mail on Sunday
Homeware retailer Dunelm Mill last week said sales for the 13 weeks to October 2 were up 11.6% year-on-year. The company is opening 11 stores in the financial year to June and is entirely debt-free, with more than £18m in the bank.
Next February, Nick Wharton, currently finance director of Halfords, takes over as chief executive.
Prospects for retailers are difficult to gauge, but Dunelm has several advantages. Customers spend about £30 on average, a relatively small sum compared with spending at other store groups.
The company also hopes to expand its portfolio to about 200 stores over the next few years, boosting sales and profits. The group has plenty of outlets in the Midlands but it is under-represented in the South, East Anglia and Scotland. There are also plans to increase its online presence. Dunelm shares are 420.5p but should trade higher over the next few years.
This is a solid company run by experienced managers and backed by a supportive and knowledgeable founding family. Buy.
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