Sunday newspaper share tips
We round up the key stock picks from the Sunday newspaper business sections.
Sunday Telegraph
Last week's full-year numbers from James Fisher showed the ship is on a steady course.
The marine company showed a steady rise in profits, boosted by its specialist technical division.
Its marine oil business, which transports oil around the UK, managed to return to profitability but it will be some time before historic levels of earnings are achieved at the unit.
The company has transformed itself from a UK coastal shipping company to a business focusing on high-margin specialist skills. These include nuclear decommissioning and specialist subsea activities.
In 2000, the Priz, a Russian mini-submarine with seven crew members on board, sank off the coast of Kamchatka. James Fisher's crew managed to rescue the submariners with just five hours' oxygen left.
The company focuses on niche markets with margins of more than 10%, pre-tax returns on capital in excess of 15% and ones that are strongly cash-generative.
The group has made a number of acquisitions. The expanding range of niche businesses means Fisher is able to win larger projects by drawing on the broader range of complementary skills held within group companies.
The bolt-on purchases are also opening up opportunities in Asia, where the marine services industry is rapidly expanding.
In the year to December, revenues rose 8% and pre-tax profits rose to £25.9m from £24.7m.
The company is building a strong niche business in markets that are likely to improve over the next few years. Although the performance is unlikely to be spectacular in the short term, the prospects look very good for this well-run company.
The rating on the shares remains buy.
Mail on Sunday
Stadium Group was founded 100 years ago and made its name producing car parts. But fast forward 90 years and it was in rather a mess.
The company had expanded into a variety of unrelated areas, encompassing everything from plastic baby baths to ventilator fans. Some companies thrive on diversification, but Stadium was struggling.
In 2001, finance director Nigel Rogers was promoted to chief executive and tasked with streamlining the company and making it more focused.
Rogers did precisely that, selling off non-core divisions and turning Stadium into a pure electronics business.
Today it makes components, such as circuit boards, and finished products, such as motorway display systems and smart meters for water and electricity readings.
There are two factories in Britain - in Rugby, Warwickshire, and Hartlepool, Teesside - and a large plant in China.
The British sites focus on more bespoke products as Stadium often works with manufacturers, designing items to their specifications.
The Chinese facility churns out more standardised goods, made in volume but conforming to British quality and safety standards.
Now the company is ready to move into a different gear. Rogers is leaving next month and chairman Nick Brayshaw is taking over his responsibilities until a new chief executive is appointed.
Last year, Stadium increased its turnover by 27% to £49m while profits rose 95% to £2.9m. The dividend was up 11% to 2.5p.
Brayshaw believes turnover can double to £100m in the next three to five years, bringing higher profits and dividends in its wake.
The electronics market is growing at ten to 15% a year and Brayshaw expects Stadium to outpace it organically and by acquisitions. Buy.
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