Newspaper and magazine share tips

By This Is Money
Updated: 08:23 EDT, 22 October 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: We round up the latest share tips from national newspapers and investment magazines

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FRIDAY

Investors Chronicle

Serco manage infrastructure and services across various markets, including prisons, health and welfare support, and waste management for councils. The company look set to benefit from the government decision to contract out at least £100billion of public services, and so far only £15billion has been outsourced, leaving huge potential for contracts. The government seems keen to shift services from the public sector to private companies. Buy

The hedge fund manager, Man Group, have seen a dip in both management fees and performance fees. First-half performance fees for next year are predicted at $10million, compared to $43million last year, and profits down from $268million to $215million. That said, fund performance is improving, though this may falter as the financial outlook is looking a little calmer than previous years, lowering the needs for investors to seek cover with hedge funds. Sell

African Barrack Gold, the gold producer based in Tanzania, have the potential to raise their production levels organically and through acquisitions, leading to an increase in profits and a cut in operating costs. It has four mines operating at the moment and seven main exploration projects in Tanzania. With an operating cash flow of $158million in the first half of 2010, and net cash of $334million, as well as financial backing from its main shareholder, Barrick Gold, the future looks good. Buy

The Independent

William Hill is expected to report full-year profits of between £247 and £262million, the top forecast. They have good earnings and an increased consumer confidence. Though the political backdrop may be uncertain, as the government may decide to claim tax back on the company moving its gaming businesses offshore, the shares, valued at 8.9 times forecast full-year earnings, look set to hold their value. Buy

Debenhams has announced a 21% increase in headline profits to £151million for the year up to August, as well as an increase in like-for-like sales since last year. A main success has been their launch of many own-line products, making prices cheaper. Their debt has been cut from £73.5 to £516.8million, but caution is advised for the next year as shoppers typically have less money. Hold

Henderson's shares have gained 10.6% since February, with assets rising from £2.8billion to £59.2billion, but a small net overflow of £100million. Chief Executive Andrew Formica advises retail and investor caution due to the gloomy economic climate. Third-quarter trading was reasonable, but the beginning age of austerity and choppy markets makes short-term investing a risk. Hold

The Times

Digital Barriers have had a busy year, acquiring company Waterfall Solutions, with the initiative of building a medium-sized IT company specialising in counter-terrorism technology, supplying technology to the defence sector. The revenue from this venture has been £2.1million and a £500,000 profit in the year to September. With a good management team, Digital Barriers' shares look set to continue upwards. Buy

The oil services company, Petrofac, is looking to close its largest contract yet, on South Yoloten in Turkmenistan. If successful, the company's order book would reach a record $11billion. There is also growth opportunity in Iraq and Algeria and an order intake of $2.6billion this year, however share values are growing slowly, only rising by 5p for the third quarter to £14.85. The health premium of shares now raises doubt as to any improvement, though shares have gained 52% since last year. Hold

The Telegraph

Enterprise Inns, one of Britain's biggest pub owners, had a rise in shares yesterday morning after The Office of Fair Trading stated that rules imposed on pub tenants by landlords do not harm consumers, lifting the threat of legally-imposed change. But then shares fell again, as the spending cuts mean there is no optimism surrounding consumer-facing businesses. Shares struggle to get above 108p, despite a 774p high back in 2007. Avoid

Renold's chains have increased sales by 18% over the past six months with unexpectedly high profits. The company makes chains for vehicles, theme park rides and escalators, and suffered a challenging time during the recession, but chief executive Bob Davies believes demand is now in the up. Renold is further benefited by having sales diversified across geographies and industries, and a future with emerging markets in India and China, allowing for growth despite UK construction markets being slow at the moment. Buy

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THURSDAY

Shares Magazine

Blinx, the online video search software, has had a leap in share prices, proving its large online search volumes can be translated into a profitable business model. Shares have risen from 13p to 88.7p, a gain of 582%, while revenues for this year are expected to be $27million, equalling profits of over $1million. Leading technology is helping the success; distribution deals have recently been announced with the BBC, Samsung, Apple, Google, and Microsoft. Buy

Mothercare has announced a 3.2% drop in like-for-like sales for the three months to October, representing the third consecutive quarterly decline. This trend looks set to continue as it has opened larger trading centres, directly lowering sales from its high street stores, and has misread the Christmas toy market forcing a need for lower prices. There is also much competition on the baby market, particularly from Tesco, Sainsbury's and Asda. Consumer confidence in products is falling as they look for value. Sell

The Telegraph

Shares in the rail and bus operator Go-Ahead Group have dropped this year, from £15 in March, due to cuts in public spending. However, there has been no cut in the Bus Service Operator grant (the grant that reimburses 80% of fuel on certain journeys), which will be maintained until 2012 before being cut by 20% over three years, a better than expected outcome of the spending review. Shares have been rising since George Osborne's speech. Buy

May Gurney, the infrastructure services group, could benefit from the improvements in rail infrastructure mentioned in the spending review. The group are involved in coastal erosion management, which the Chancellor said would receive much funding to protect homes. A further opportunity for the group is through their work refurbishing schools as it was announced £15.8bn will be spent refurbishing 600 schools. Buy

The Independent

Telford Homes, the housing company that focuses mainly on regeneration in east London, may have hard times ahead. This is down to the probable impact of the recession pushing down profits, though their 206 house sales since April is as expected. Shares, which hit 118p in April, have already lost a quarter of their value since profits losses became expected. The Olympics, and a need for new housing, cannot overrule the spending review cut and holding is only recommended if you can wait two years before a return. Sell

The engineering business, Clyde Process Solutions, is celebrating the news of a £1.2m contract with a Chinese steel company after working with the company previously last year. Winning repeat business is a significant success and with shares trading at a not-too-pricey level (eight times forecast earnings for the year to February 2011) and a high debt reduction, they may be worth investing in. Buy

The Times

Sports Direct has had its fortunes upturned slightly by the announcement yesterday that it is no longer being investigated by the Serious Fraud Office. The company is now looking to focus on trading instead of attracting attention, abandoning a takeover attempt of Blacks Leisure. They have reported improved sales and profits in the run up to September, boosted mainly by World Cup sales of England tops, but without any major sporting events next year, and no like-for-like figures, the future is uncertain. Avoid

Dragon Oil, the only UK oil company with production in Turkmenistan, is playing a huge role in supplying the country's hydrocarbon reserves. However, its one main development, the Chelekan development in the Caspian Sea, has been beset by problems, unsettling investors and convincing many that the company is a one-trick pony. Production growth for 2010 has reduced from 10% to 5%. There is growth opportunity, with big reserves of oil and gas and an exclusive contract at Chelekan for 25 years, but the immediate future is shaky. Avoid

WEDNESDAY

The Independent

The engineering parts suppliers company, GKN, continues its success, with third quarter figures showing sales up by 21% to £1.34bn. Profits in the first nine months were £302m, compared to profits of £77m for the 2009 year. Profits are mainly due to renewed automotive demand in the US and Asia, and though aerospace sales fell by 3% in the summer, prospects for 2011 look healthy. There is a prediction of earnings 10.5 times that of 2010. Buy.

National Express has announced profits up by £5m for the quarter ending September 20th. UK sales have increased by 4%, fighting off competition, and a 7% growth to revenues. It also predicts future revenue growth in North America. However, caution is recommended as the company's high proportion of UK revenue could be affected by today's spending review and the Competition Commission's investigation into the British bus market in January may cause more damage. Hold.

The Telegraph

Veterinary surgery consolidator, CVS Group, have seen their shares fall 44% this year, though recently shares have risen since the last review in August. Turnover for the year is expected to be around £85m, £1m lower than expected. The company is focussing on cutting debt, expected to be cut by £33m by the end of this year. To counteract people tightening their belts on pet bills, CVS have launched an online pet shop called Animed Direct, but be cautious until like-by-like sales are rising again. Hold.

Bunzl, the distribution group, which provides disposable items to large companies such as Costa Coffee and Asda, has announced a high revenue growth of 6% for third quarter trading, with revenues up 3%. The UK sales are low due to the gloomy economic climate, though margins are improving. Bunzl grows through buying family-run businesses looking for new owners, and nine purchases have been made this year. Buy.

The Times

New Britain Palm Oil, makers of palm oil used in cakes and soaps, has seen its biggest rise in shares, by 35.5p to 696.5p, making it the highest ever figure for the company. Future predictions are that the shares will rise to 800p. The company has plantations in Papua New Guinea and the Soloman Islands, and has seen production of palm oil rise by a fifth this year. Buy.

TUESDAY

The Independent

One of the world's largest brewers, SAB Miller, has toasted soaring sales in emerging markets, offsetting a decline in other established sections. The company brews global brands including Peroni and boasts sales jumping by 10% in Africa and Asia over the summer months, particularly helped by the World Cup. Though lager volumes fell 5% in Europe, overall SAB Miller is faring better than expected with shares soaring this year. Yesterday the shares reached 208p. Hold.

Nanaco are the company who make quantum dots found in televisions and are causing a stir, as they provide TV manufacturers with improved colour, quality and brightness while using less power. Nanaco is expanding, with contracts already signed in Japan and now South Korea is looking promising, and production levels moving to 'volume production'. Revenues are rising from £1.9m in 2009 to £2.9m in the year to 31st July. Profits are predicted by 2012. Buy.

The Daily Telegraph

Inmarsat, the satellite group, is finding its shares to be under pressure, mainly since it became apparent the US fund Harbinger have sold down a stake in the group. Harbinger still owns 14% of the company and working with the company on US broadband provider LightSquared. The company's shares are set to fall to 17.5 next year, and a hold rating has been put on them since August 12 when they fell to 702p. Hold.

Rio Tinto, the mining company, has seen share values increase since their venture with BHP Bilton fell through. The companies are now going their separate ways and since then, the iron-ore market has experienced a boom. Rio Tinto plans to expand iron production to 330m tonnes a year by 2015, and their shares are now rising, by 21% since May. Buy.

The Times

Vertu Motors is Britain's eighth-largest motor dealer with 74 outlets. Its chief executive, Robert Forrester, is relentlessly optimistic about the market. He believes customers are immune to the recession, despite a 19% market-wide fall in car sales in September, though Vertu Motor's sales only fell 2.6%. Shares are priced 5p to 33p, however due to the buying lapse predicted because of spending cuts and January's impending VAT rise. Avoid.

Hardy Underwriting is a specialist insurer operating within Lloyd's of London. Yesterday Beazley, the marine and commercial property specialist, made a 300p-a-share approach to Hardy Underwriting, having valued the company at £155m. This is an opportunistic move by Beazley, coming off the back of weaknesses in Hardy's group following big payouts for Australian windstorms and February's Chilean earthquake, causing profits to fall from £7.8m to £800,000. Beazley are offering a 36% premium to Hardy's share price, but this battle will be judged by the shareholders, and the future is uncertain. Avoid.