Newspaper and magazine share tips

 

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

Pile of newspapers

Round up: The latest share tips from national newspapers and investment magazines

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FRIDAY

Investor Chronicle

BBA Aviation seems to be largely underplayed by UK investors. Based largely in the US, BBA's largest division, Signature, offers support services to private jets and other smaller divisions carry out repair and engineer support work. The cyclical nature of the business is a concern but few experts in the US are concerned about a double dip, especially for a sector reliant on corporate spending. Private jet flying hours increased 5.5%, 1991-2009 and this company has had a solid growth in earnings. A decent dividend yield also makes this a good buy.

All time high ore prices during the second half of 2010, a return in demand from key markets and an increasing production output made a strong year for Ferrexpo. The Ukraine based mining company has a strong geographical position, offering customers the lowest supply costs in and around Europe. Whilst there is potential instability in the Ukraine, the company has strong cash flow and has begun a $650m investment programme to further increase its production. It has strong growth planned through to 2013, making this mining share a buy.

The Daily Telegraph

Political unrest and the risks involved in a single asset company have resulted in a drop in share prices for Centamin Egypt, the first modern gold mine operator in Egypt. This presents an opportunity as analysts agree the riots will have a 'minimal' impact on mining. Centamin are due to release a Q4 update on Tuesday, tipped to show significant acceleration in quarter-on-quarter gold production and they are working to improve the grade of the ore. Things could get worse before they get better in Egypt, but the price fall makes for a tempting buy.

Petropavlovsk, a mining company with operations in Russia, has made some ambitious claims in the past. It learnt the hard way, in the sharp drop in share prices, the risk of over forecasting. But Chairman Peter Hambro says he has 'learnt from the difficulties' and the success of this company lies in the year ahead. Petropavlovsk is expected to increase production by 18% to 600,000 ounces in the current year to December which will be a major milestone for the miner, beating some of the FTSE giants. Shares for Petropavlovsk are an appealing buy.

The Times

AstraZeneca, a UK pharmaceutical company, announced flat revenue and operating profits for 2010. They are cutting their cost base to give £4.3bn annualised savings by 2014 but they are still only hoping for flat profits and revenues for 2011. Disappointments in a couple of their main drugs have compounded a major problem of the pharmaceutical industry, where old drugs come off patent faster than they can be replaced. The concerns with this company have been around for a while but for the time being, sit tight and hold.

Yesterday Severfield-Rowan reiterated its message that the flow of London mega-projects was coming to an end and that deferred projects will not come on stream until 2012. This steel giant is facing a tough year, especially as the joint venture in India of Jindal Steel and Power will begin to kick in, taking business from wealthy Arab and Emirate states. With difficulties in the construction industry anticipated to last into 2012, you'd be best advised to avoid.

The Independent

Yesterday Aquarius Platinum, the world's fourth largest platinum producer, announced second quarter production results up 3% on the previous quarter and up 14% on the previous year. This is gives a strong footing for the rest of the year and the company is hot tipped to participate in the industry consolidation expected in South Africa this year. But one of the biggest users of platinum, the car industry, faces very tricky times ahead. This alone makes pursuing shares risky. Avoid.

There was a positive message from the London Stock Exchange, who reported total income up 6% in the third quarter of last year. Although the UK economy looks shaky, the LSE is now an international business and benefiting from an improving global economy. Chief exec Xavier Rolet has shown his talent and his range of initiatives designed to boost LSE's income look to be bearing fruit. At 12 times forecast full-year earnings, shares are still looking good. If you have them, we say hold.

 

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THURSDAY

Shares Magazine

GoldStone Resources is a junior gold explorer, with permit-pending exploration projects underway in Ghana and Gabon. Like many junior resource companies, Goldstone's projects are located near to existing mines, where the likelihood of licence extension is higher. The neighbours of Goldstones projects include some very high profile discoveries. Whilst there is no guarantee that permits will be issued or that explorations will be favourable, 7.3p shares are certainly worth a careful consideration to buy.

The strengths in Sports Direct are worth taking note of. Firstly, the company generates a lot of cash, with half year results exciting the market with a 40% rise in pre-tax profits to £100.7m. Secondly, net debt is set to fall this year by £110m to £200m. And thirdly, Sports Direct stores consistently perform better than their main competitor, JJB, which has been further amplified by JJB's recent poor performance. The company passed on the dividend last year but with sales success and debt relief set for this year, there could be opportunity for share holder reward. Buy.

The Daily Telegraph

Following yesterday's announced from BG Group of another oil discovery off Brazil, it seems the true value of BG's shares is beginning to be realised. No reserve estimates were offered but the news was significant enough to send shares close to their all time high, closing yesterday at £13.72. BG's exposure to oil will further increase as Brazil comes on stream, with investor expectations of 64% of production being oil-linked by 2020. BG has a target of 6%-8% production growth between now and 2020, a new CFO and a hot tipped strategy presentation for February 8th. Buy.

A trading update from African oil group Afren yesterday confirmed fears that the equipment delays from December would affect 2011 production. But this does not affect the amount of recoverable oil from the Nigeria block and production will be back on track by the year end. Afren plans to drill nine exploration and appraisal wells this year and hinted that acquisitions were possible. The company has increased its cash flow for this year and is tapping into the bond market to increase funds. With ample promise on the table, buy.

The Times

Cookson Group, who makes ceramic and other equipment for steel plants, is expecting last year's revenues to come in at £2.5 billion and trading profits of £250million, ahead of city predictions. Cookson has pledged to raise earnings over the next three years by double-digit rates, hoping for a 16% growth this year. The risks include a business which is dependant on a highly cyclical industry and a misfortunate recession-cusp buy leaving debts of more than £400 million. However it still feels like these shares are set to rise. Buy.

Renishaw, a Gloucester based company who make specialised measuring equipment, have come back from the recession with strength. Coming under fire for cutting a fifth of the work force as the economy slumped, Renishaw have since benefited from China's plan to build a high-tech manufacturing sector. Renishaw's sales from the Far East now represent 42% of total revenues and have more than doubled year on year. India and Brazil are the next potential growth areas. The halfway profit announcement has sent shares high but it's still a worthwhile investment. Buy.

The Independent

WH Smith is one of the few retailers resisting to blame the poor weather for sales. While like-for-like sales on the high street were down 6%, WH Smith was down only 3% once entertainment sales were removed. Costs were 'tightly managed' by their highly regarded chief exec, Kate Swann, and the continued investment in books and stationary has delivered steady growth. Despite a stealthy share come back since August last year and a tough consumer climate ahead, there looks to be legs in these shares yet. Buy.

It's been a mixed year for System C Healthcare who offers IT systems and services for hospital records. On the plus the NHS contract procurement process opened up but this happened at the same time of huge government cuts and a winding up the National Programme for IT. These two factors have led to a fall in revenues and profit. But the company is shifting from a service dominated business to creating more software. Systems C's key product, Medway, is in negotiations with 33 trusts. Whilst cash may take a while to come through and uncertainty remains over spending cuts, the company still has potential and cash in the bank. Buy.

WEDNESDAY

The Daily Telegraph

After yesterday's profit warning, shares in Hornby dropped by 11%. The company said it will miss full-year expectations but have not disclosed by how much. Like most retailers, Hornby have blamed the poor weather. Hornby benefited from an increase in sales last year following a BBC series Toy Stories and is expected to profit further from its development of Olympic merchandise. Analysts have predicted the profit shortfall to come in 28% under the pre-tax forecast but until Hornby disclose their figures, hold.

RSA was another company citing adverse weather for missing its profit target. Winter related claims cost the insurer £110m in the UK alone with call centres experiencing a 90% increase in calls. Despite this, the business's performance has remained profitable and the company is predicting an even better December 2011. The group announced last week that it would stick to its plan to increase dividend in line with inflation even in light of the bad weather. If you are looking for a pay out, buy.

The Times

Share prices of online service provider Playtech are rated below it's comparators but there is scope for future growth. The increased legalisation and regulation in the gaming industry and Playtech's US gaming contacts should help to make the business a likely state-side partner. The company also announced a 37% rise in share profits from a joint venture with William Hill which indicates potential for future alliances. But there are risks, including the role of founder and largest share holder Teddy's Sagi's approaching deadline to buy a group of other service companies and a misleading piece of market guidance from 2009 which got the investors back up. As long as you are educated in the risks, buy.

PZ Cussons, of Imperial Leather, Carex and Original Source fame, is nervous. The outlook of sales in Britain, a general drag on global consumer spending, commodity price increases and uncertainty ahead of elections in Nigeria, where Cussons has 40% of its businesses, are four factors making PZ Cussons anxious about future profits. But the company is responding to increasing high street competition by diversify its brands, including the acquisition of The Sanctuary and St. Tropez. These have left a sum in the bank and there is optimism over future joint ventures. This one's a clear hold.

The Independent

Babcock International put out a solid trading update yesterday in the face of relatively light government cuts to the Defence sector. Babcock statements showed the company to be hitting financial targets and had strong contracts worth £12bn on the cards for 2011. Following the acquisition of its largest rival VT last year, Babcock has exceeded expectations on paying down debts. Buy.

Table-top war game maker Games Workshop has already experienced a tougher than expected 2011 blaming inexperienced store managers for the anticipated short fall in May's annual profits. The toy maker is now putting an emphasis on customer service and taking steps to trim its international cost base. The wholesale business and niche customer base provide some protection for the expected drop in consumer spending but it's not convincing enough to chase. We recommend a hold.

TUESDAY

The Daily Telegraph

De La Rue dropped 15% yesterday to 695p after a takeover proposal was rejected from French technology company Oberthur. Analysts have pointed to De La Rue's long term value, mainly in its good long track record. Oberthur are barred from making another takeover bid for six months, but they would need to significantly increase their 935p bid as the De La Rue board have drawn a line at £10.00 apparently with major shareholder backing. The immediate future of De La Rue looks turbulent, but the pricing for this is in and the long term prospects support that it is a time to buy.

The Independent Commission on Banking (ICB) is likely to recommend considerable changes to the way the banking industry is run and the future of British banks at this time looks uncertain. Shares in Lloyds and RBS dropped yesterday amidst these ambiguities, Lloyds falling 3.5% to 65.05p and RBS down 2% to 44.08p. Until the ICB report is published in September, it looks like the UK banking sector will have to sit with haziness and a hold on shares is recommended.

The Times

Yesterday, Premier Foods announced the sale of the non-meat division, including Quorn, to Intermediate Capital Group for £205m. The sale cuts Premier's huge debt pile slightly, but not by much, and there will be a small negative impact on earnings. Premier have hopes to present to the City a business which has borrowing below £1bn (down from £1.75bn in 2009) and with trading profits of about £300m a year. The climate is not in their favour however, as we are entering a period of expected low consumer spending, pressure on the cost of raw materials and heavy price cutting by supermarket customers with debts still of concern. Avoid.

Mitchells & Butler will announce their Christmas trading figures on Thursday this week and analysts are expecting to see like for like sales up 1% on last year. M&B has become more heavily focussed on meals as sales imply this is a pub-tradition punters are not happy to go without. Management changes are also on the cards with Chairman John Lovering stepping down this year. Although shares have recovered since the autumn the huge debt of £2bn suggests this is one investment it might be best to avoid.

The Independent

Currently in a legal dispute with the Inland Revenue about weather Spot the Ball is a game of skill (VAT) or chance (no VAT) the outcome of the case is unlikely to affect the good value of Sportech shares. A pool betting specialist with operations in 30 countries the time could be right for this companies' luck to come in. Yesterday's trading statement showed the business in good health, with earnings in line, debt slowly coming down and a possible bid for Tote on the horizon. Shares trade on just 7.7 times full year 2011 forecast earnings, all of which help to highlight it is the right time to buy.

Amiad Filtration had a lively year in 2010. Having completed a £6.3m merger with it's biggest rival, Arkal, yesterdays trading statement confirmed expectations for a 27% growth in full year revenues to $88m from $69m last year. With increasing global populations, rising wealth and warmer temperatures pushing water purification further up the political agenda, business certainly looks promising. But with all that said Amiad has still experienced huge growths and slumps over the last year, some of which the company and its brokers are still at a loss to explain. If you can handle your nerve, buy.

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