Newspaper and magazine share tips

By This Is Money
Updated: 11:02 EDT, 18 March 2011

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

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.

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FRIDAY

The Times

Premier Farnell, the British distributor of electronic components, had online sales top 50% for the first time in the fourth quarter of last year. Margins have continuously grown over the past nine quarters and reached 41% in the last quarter of 2010. Profits before tax for the year to end of January came in 74% higher at £93.3m. The shares sell on 13 times this year's earnings, which is reasonable for Premier. A strong hold for now, but in the long term, a Buy.

TT Electronics, the global electronics group, showed pre-tax profits for 2010 before one-offs were £20.7m. Margins grew by 3 percentage points to 4.4% and are set to meet targets of 8% by 2015. Much of this progress is already in the market. The shares are on about 14 times this year's earnings, although margin improvements are expected to give a multiple of less than ten times for 2012. Hold.

The Independent

Aegis, the UK-based marketing group, showed overall sales rise by 5.4% to £1.4bn in 2010 over the previous year. However, the group has revealed it is tackling debts of £25.9m. Aegis is on a price of 12.3 times forward earnings. The shares more than doubled from their nadir in the fourth quarter of 2008 to February 2011, but have dropped by around a tenth since then. Aegis presents a buying opportunity in the short term, and may well provide value further out. Buy.

Savills, the international real estate group, said pre-tax profits shot up by 173% to £36.8m over the year to the end of December on revenues that were up by 21% to £677m. Savills's Asia-Pacific division accounted for more than 41% of group revenues, leaving its UK division with less than 50% of turnover for the first time. Savills is a tightly run company with a falling price-to-earnings ratio and rising yields and is well positioned to benefit from the strengthening global economic recovery. Buy.

The Daily Telegraph

Cape, the energy services group, reported that revenues fell 0.8% to £650.1m, but pre-tax profits came in at £63.1m, reversing a pre-tax loss of £15.6m in the previous year. Cape's shares are trading on a December 2011 earnings multiple of just 9.9 times, falling to 8.9 next year. Although the company is expected a flat first half of 2011, Cape then expects a period of 'high earnings growth' all the way to 2015 and plans to almost double its earnings per share to 80p in 2015. Buy.

THURSDAY

The Independent

Imagination Technologies, the British-based computer chip designer, said that the company's licensing business was being driven by 'key transitions' in existing and emerging markets. Imagination has predicted that its key area - graphics chips - had the potential to reach multi-billion annual units over the next five years. The company expects significant growth in the medium term. But as Imagination trades at 58 times forward earnings, Arm – another British chip manufacturer – might be a better stock option in this category. Hold.

Marston's, the pub and brewing group, which owns 2,150 pubs, has been one of the sector's best-performing businesses over the past three years. Its managed division grew like-for-like sales by 2.4% for the 23 weeks to 12 March. Despite profits in 2010 falling by 4%, it managed a 0.1% rise in like-for-like profits. The group's shares have come under pressure over the past three months since hitting a 12-month high of 118p in December. A forward-earning multiple of just 8.4% makes the group's shares worth a shot. Buy.

The Daily Telegraph

Last February, Greggs launched its breakfast meal deal and has since sold 10m breakfast rolls with further expansion planned. Sales rose 2.1% to £662m pre-tax profits rose 8% to £52.2m and the dividend per share was increased for the 26th consecutive year to 18.2p. Trading conditions for Greggs are tough as it battles soaring raw-material costs. Greggs is trading at 11.8 times earnings. Moving to 104 for 2012, and a yield of 4%. The bakery has predicted only 'marginally positive' like-for-like growth for 2011 and so far these are up by 0.4% this year. Buy.

Despite a changeover in CEOs, the InterContinental Hotel Group, said little would change in terms of strategy and that its focus on brands and new hotels will continue. The key measure of revenue per available room has risen and demand is picking up. With ageing populations travelling more and an expanding middle class seen in emerging markets, these statistics are encouraging. The group trades on an earnings multiple of 18 times this year, falling to 15.2 next year. The dividend yield is 2.4%. Buy.

The Times

Tullow Oil, the global oil and gas exploration company, has agreed on a deal to settle a tax dispute with Ugandan authorities. The agreement will allow Tullow to proceed with the sale of two-thirds of it, to allow larger companies to help with its exploration efforts. The first oil from the deal will be produced in 2015 and it doesn't look as though Tullow will have to cover any of the tax bill left from its acquisition of Heritage oil. Good news, of course. However, speculation surrounding the company and where its net asset value stands is making it hard for the markets to get a handle on this. Proceed with caution. Hold.

Mecom, the newspaper publisher, has shown decent profits. Mecom showed that it's in control of its borrowing and it's just about to touch on its first time dividend payment. Its bout of cost-cutting is over and last year profits before one-offs were up 28% to 155.5m euros this year; margins grew from 8.4 % to 11%, and 12.5% is in prospect this year. The shares have been valued at less than six times this year's earnings, while forecast total dividend this year of 14p suggests a yield approaching 6%. Still speculative but not unattractive. Hold.

WEDNESDAY

The Daily Telegraph

Royal Dutch Shell delivered a confident annual strategy update yesterday. The company announced that it would be spending £62bn over the next four years to help maintain output growth. Shell has shown positive results in its first of a three year programme to drives performance. It has sold off assets and cut thousands of jobs to focus on growth areas and free up cash. Despite the Middle East unrest and evacuating its Libyan business, the overall growth picture for the company is encouraging. In March 2010 the value of Shell shares was £18.57, since then the share price has climbed 11.5%. The prospective dividend yield is a little over 5%. Buy.

Mears, the housing and homecare group, has had volatile shares over the past year because of concerns of public sector spending cuts. Mears also slid another 7% yesterday. The slump was blamed by the company on profit-taking and this presents a buying opportunity. Expansion is set to come from increased public sector outsourcing, acquisitions and local authorities backing more affordable care in the home. Results from Mears for 2010 showed the group's revenues grew by 11% to £524m, securing a 15th year of record growth. The group will provide affordable housing and care solutions to the UK's ageing and will pick up contracts from failing rivals. Mears trades on an affordable 2011 price to earnings ratio of 10 and a yield of 2.6%. Buy.

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The Independent

G4S, which provides security staff for everything from nightclubs to embassies has reported turnover up by 4.1% to £7.4bn, while profits rose by 4.2% to £527m over the year to the end of December 2010. G4S also has a confident outlook for 2011, so much so that they are raising their dividend by 14%. The group also invested £65m in a series of acquisitions across Latin America, boosting revenues from emerging markets division. Thanks to this, the group managed to offset any effect from the recession on its core UK and US divisions. G4S shares are trading at around 11.9 times forward earnings. Buy.

Luminar, the leisure and entertainment venues group, announced yesterday that same-outlet sales for the year to 26 February were down by 18.6%. This decline was attributed by the group to a reduction in admissions to its venues. Looking ahead, Luminar said that the launch of its Jongleurs comedy nights at four clubs had been successful and that they are planning to extend the offering. This will hopefully rake in extra profits for the company. Despite some bad news surrounding Luminar, the markets seem to be discounting this as the group is trading on around 3 times enterprise value to earnings before interest, tax, depreciation and amortisation. While the rate of decline in sales is improving, the wider economic picture remains cloudy at best. Hold.

The Times

Close Brothers Group, a group of specialist financial services businesses, revealed halfway figures yesterday that showed a good performance from one of its retail brokering operation. Close is building up its asset management side and is halfway through a £20m investment programme. Changes to the rules governing independent financial advisers in 2012 will also allow the group to pick up business. Operating profits before one-offs rose 5.5% to £65.4m and the dividend is held at 13.5p. Close Brothers shares have had a good run subsiding 2.4% yesterday. The shares are on about 12% earnings and yield about 4.7%. About high enough. Hold.

TUESDAY

The Daily Telegraph

Aggreko, the global temporary power provider, was hit last week by a fall in its share price, which followed Aggreko's warning on the grim outlook for 2011 as instability continues to spread across the Middle East and North Africa. However, on March 14 Aggreko's shares climbed 5.5% following expectations that it will be called in to help with Japan's twin disaster. The company is said to help supply Japan's troubled population with electricity. Despite the volatility in Aggreko's stock price, investors are being drawn when considering the company's shares are up 58% since 2010. It reported a 17% revenue increase to £1.22bn following strong growth from emerging markets. Buy.

Southern Cross, the UK care home provider, has seen its share prices fall to a little over 5p. This is remarkable when you think that the company was worth 606p in November 2007. However, the overall doubt surrounding the company's performance and future has meant that investing in it would likely turn out to be a mistake. It has admitted that it is in a crisis and that it has hired administrator KPMG to negotiate deals with its landlords to help the ailing business. The biggest hit to Southern Cross will be the referrals they once received from local authorities are being cut thanks to the government's public sector cuts. Sell.

The Times

Bovis Homes Group opened 33 sites last year and now has a total of 78 in operation, selling about 1,900 homes. By 2013 the number of sites will be up to about 100 and sales should be back up to their earlier peak of 3,000. Last year saw a good performance as it pushed average selling prices up by 9% up to £180,600, sales volumes up by 5% and operating margins ahead of by a percentage point to 7.2%. All this activity sent pre-tax profits ahead from £7.5m to £18.5m. However, Bovis shares are trading at 80% of net asset value, which has been described as a small discount , with Bellway and Persimonn trading in the 70s and Barratt Development on less than half net asset value. Sell.

St Ives, the independent printer, has been busy relocating from its offices in Southwark. The company is no longer involved in printing annual reports, prospectuses and other financial documentation. Yesterday, St Ives announced the sale of its loss-making magazine printing side. The management of St Ives is taking the company further into marketing and specialist printing. Despite the company's recent acquisitions, St Ives is still far reaching its previous strength when restructuring and cost-cutting sent the company as a whole into a loss in 2009. Today's figures for the half-year to end-January will indicate a further recovery. The shares were up 9.6% as of yesterday. Buy.

The Independent

Along with many other retailers, shares in Next have come under pressure over the past five months. The fashion and homewares group's shares powered past 2,300p in October but have fallen back since then, as investors fretted about a deteriorating outlook for consumer spending. Following the impact of the dreadful snow before Christmas, Next guided towards annual profits of between £540m and £555m for the year to the end of January. With the outlook for its high street stores looking tough, we urge caution until the outlook on a sustained recovery in consumer spending is clearer. Hold.

WS Atkins's £785,000 acquisition of RWE nPower's Scottish consultancy and technical support scheme may be small, but it is a significant move for the group. It brings an extra 30-odd people into the engineering and design company, and is right in line with the group's long-term strategy to expand its activities in the energy sector. The deal is not big enough to directly affect the group's financials, which a recent statement confirmed to be in line with expectations despite "challenging" trading conditions. But it does signal WS Atkins's active implementation of a sound strategy. Add in the fact that the stock is attractively valued and the investment case comes almost readymade. Buy.