Newspaper and magazine share tips

 

A pile of Newspapers

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

Investors Chronicle

Any belief that UK retail conditions are improving - based on healthy March sales - looks misplaced. Dunelm, the homeware retailer is evidence of the pessimistic outlook with like-for-like sales slipping by 1.3% in the 13 weeks to the beginning of April. Gross profit did improve slightly but current inflationary pressures are expected to adversely affect this in the future. A plan for a number of new store openings is the dominant cause for any future growth. Share prices have risen for the last seven weeks by over 20%, being pricey for any retailer but especially for one with falling underlying sales. Sell.

United Business Media (UBM) has been reducing its over-reliance on print revenues and increasing events operations for the last few years. The combination of these steps should see the media company return to growth shortly. UBM, unlike its rival events operations, has focused on emerging markets where growth has been most consistent. Despite being the world's fourth in exhibition operations, shares are currently under-valued, possibly due to unreasonable debt concerns. Buy.

 

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The Daily Telegraph

Backed by solid year-end results, investment in National Grid is really a yield play. Pay-outs for the full year of 8% will be served out on August 17 and shares can still be bought by June 1 to qualify. Prospective rises of 6.3% this and 6.6% next year make for a very attractive level of pay-out. Questions hang over the future of the US side of the business, although positive signs of a turnaround have been noted. Calculations suggest a sale of its North American arm could net more than £16bn, with shareholders in line to split amongst themselves an £8bn dividend. A sale has not been ruled out and at present the shares look cheap. Buy.

Trading at camera and photography group Vitec has been good. The Telegraph tipped them back in early December and are up 6% compared with a market up of 3%. The company is involved in three separate areas though its progress in military, aerospace and government sectors could be most interesting. Based on a system of microwaves, Vitec has produced a high definition video which can be used to monitor protest groups or for covert surveillance, for example. This technology could be highly useful in fighting various forms of serious crime. Buy.

The Times

The credit crisis never happened for African beer drinkers, according to SABMiller's chief executive. The brewery giant is luring some of the continents aspiring middle classes with local tipples, whilst strong growth was seen in much of Latin America and their smaller Asian operation. Price rises in commodities such as barley should be relatively modest and not a real concern. Immediate progress could be limited but good news late summer could bring some impetus. Hold.

Booker's market worth is close to £1bn, which is remarkable for a company that almost went under because of debt and the recession, a few years ago. Sales for the cash-and-carry business compared to last year have risen while the wholesale market generally shrank by a percentage point in the same period. Still outperforming then, indications are that it will be slower going from here on in. Shares sell on a near-18 times multiple of this year's earnings but any weakness could provide a buying opportunity. Hold.

THURSDAY

Shares Magazine

A provider of virtual queuing systems for theme parks, the sunny Spring weather has brought a welcome boost to Lo-Q. Understandably most of its income is generated in the months between May and October, so a strong April has only been a pleasant bonus. Busy theme parks encourage visitors to pay a small fee to avoid long queues, whilst enjoying other rides in the mean-time. A change in management has addressed the company's historically-weak sales focus, bringing a new lease of life to business. Impending half-year results are likely to misleadingly reveal increased losses due to new product development contracts and investors should focus on full-year performance. It has a 182p share price target but some predict this will be only a conservative forecast. Buy.

Norcros are positioned nicely for gains in the UK market while enjoying fruits of a turnaround in South Africa. Producers of ceramic tiles, the company is also concerned in electric and mixer showers and is now reaping the benefits of its determination to continue development of new lines through the downturn. Currently the business is outperforming rivals and stealing valuable market share. By March 2012 the business is expected to reach the £200m milestone in revenue, with profits rising accordingly. Shares trade on a lowly price/earnings ratio but it is understood a more progressive approach to dividends is to be adopted by the company. Buy.

The Daily Telegraph

Britain's biggest listed property company, Land Securities, has surprised many city forecasters with their very positive results released yesterday. Analysts had pencilled in a net asset value of 768p a share but in actual fact turned out to be 826p. Without doubt, the company is heavily reliant on the economic recovery of London's property market, but this is not a bad thing. The capital has strong growth prospects amid international demand for the acquiring of key new developments in the city. Buy.

With no major 3D releases recently, Cineworld has been wounded, having invested heavily in the appropriate technology. Negative figures for the 19 weeks to May 12 were surely down to the lack of big releases in the period. The latest instalment of the Pirates of the Caribbean series and a sequel to the hugely popular original The Hangover are expected to bring more positive stats in the second quarter. A final Harry Potter film in the latter part of the year will only add to the company's confidence in its own success. Providing 3D releases continue to be rolled out, the short term future remains bright. Buy.

The Independent

The world's biggest credit reference agency, Experian has continued in its successive years of record earnings with this now its tenth. Boosted by a gradual recovery in North America, it also had positive reactions in the emerging markets it is present in. Bottom line operating profit grew across all territories and though shares are now at a premium to rivals, their impressive track record and wider growth seen in the markets it operates in should result in Experian being a sound long-term investment. Buy.

Not the greatest of years for Heritage Oil was epitomised by the news in January when gas, instead of oil, was found at one of its wells in Kurdistan. Additionally a tax dispute with the Ugandan government has thus far not been resolved, though they are confident in reclaiming all that is being argued over. The market has up until now probably responded too cautiously and there should be ample space for gains. Buy.

The Times

Compass is currently moving forward on all fronts but soon the caterer will have some strategic decisions to make. Growth in Europe appears quite slow but fast-expanding markets are bringing substantial developments. Food price inflation has been a concern in the past but the company has shown aptitude in passing costs on to customers. Shares, down 4p at 575p and sell on about 15 times this year's earnings and given the uncertainties, are high enough for now. Avoid.

Amec had indicated that the potential for further acquisitions was likely but few expected them to act so soon. The consulting engineer and project manager is buying an environmental services company, complementing its Earth & Environmental business. So far Amec has spent £250m of the £750m it had at the start of the year and predictions as to what will happen to the rest of the cash are unreliable. If there are not enough acquisition targets, some will return to shareholders. Hold.

WEDNESDAY

The Daily Telegraph

Last May, Vodafone declared a policy that guaranteed shareholder pay outs would grow 'at least 7% per annum' every financial year until March 2013. So far this has been maintained with 7.1% rise from 12 months ago. Investors can still qualify for this payment by purchasing shares before the end of the month. The US-based mobile operator has warned of challenging conditions in its southern Europe markets but emerging markets are countering this with good performances. Investing in Vodafone remains a solid and visible income stream. Buy.

Recent exploration results in West-Africa have been positive for Cluff Gold, with confirmed finds in Sierra Leone. The gold-miners were still loss-making in the last financial year, dashing any hopes of 2010 being the first profitable 12 months in the company's history, but expectations are that that hope will now be realised this year. Though share prices were recently up to 104.5p and have since dropped down to 89.125p, a buy is recommended if the inherent risks of exploration are sufficiently taken into account by investors.

The Independent

A strong performance in the first quarter have contributed to Derwent London shares rising to more than 25%, compared to 12 months ago. Furthermore there are positive signs on the horizon, with progress on lettings and developments and opportunities aplenty to exploit the capitals property market. While confidence exists in the business, there are concerns over its valuation. There is no reason to sell but it would be prudent to wait for a better time to buy. Hold.

First-half figures released yesterday justified Diploma's early confidence in the business expressed several months ago. Supplying specialist technical equipment and services to various industries, the company has revealed a rise in pre-tax profits of 50% and revenues rising by a third. Clearly still benefiting from the economic recovery, its organic revenue growth is very encouraging and may well have the finances to make further acquisitions. Buy.

The Times

Through no fault of its own, Robert Wiseman, is in a place where further progress will be slow and difficult. The dairy company has never been more efficiently run and its new facility in Somerset has been promoted as being able to deliver to every postcode in Britain. The trouble is that it is being hit with cost rises that will not be easily passed on to customers in the vicious retail market, especially among the big supermarkets. Despite winning new contracts with Co-op and Tesco, there seems to be little potential for volume growth, though encouragingly the investment phase is over. Hold.

A company reliant on European air travel, Avis was going to be affected by the volcanic ash cloud last year. In the end, the effect appears to have been minimal, with desperate one-way rentals balancing out lost custom from flyers. A 5.2% rise in rental income reflects the general recovery in air travel across the continent and the company's usually busy summer period is still to come. The real excitement is in China, where business is doubling every two years. The only issue is that shares may be hard to track down. Buy.

TUESDAY

The Daily Telegraph

The car dealership, Lookers, trading update last week was quite strong, in spite of the difficult market backdrop. Performance for the first quarter was ahead of budget and improved on last year. Selling many house-hold motoring names from its 124 showrooms, Lookers is a quality business with excellent growth potential and a strong balance sheet. Recently rejecting a takeover bid from a consortium, the situation is still totally unresolved and so a hold is suggested as the shares could fall away if the consortium walks.

Shares have been recently falling in Cranswick, with concerns about its economic backdrop and inflation fears. These have been shown to be overplayed and the full-year results were marginally better than expected. The pork products group has also announced its recent acquisition of accreditation, allowing it to export to a new market, for them, in the US. The company has invested a substantial amount in recent years and is well positioned to see long term growth. Buy.

The Independent

The public sector at present is understandably considered to be bereft of investment opportunities. Mears, the social housing repairs and services contractor, could however be an exception to this rule. Having announced yesterday the procurement of £120m of new contracts since unveiling its full-year results on 15 March, its chief executive said they 'continued to see high levels of opportunity within the public sector'. Investors should be aware that shares in the contractor have been volatile since last July and they are down from a 12-month high of 326p in January. Based on a lowly valuation and in light of strong momentum, Mears is worth a punt, being likely to benefit from weaker rivals. Buy.

Ever since floating in 2007, Xchanging have had a rough ride and this year was no different. The outsourcer saw its share price halve in just one day's trading and the subsequent resignation of its founder. Since then a four-part response has been put into action and the company's claims that trading in the first three months of this year – traditionally a slow period – has been “solid” is encouraging. The issue, confirmed by the management, that 2011 is “a year of transition” makes predictions as to how it will look at the end of the year unreliable. Initial signs do bring reasons for being optimistic but there are just too many unknowns at the moment. Sell.

The Times

Cape's chief executive reckons he will be the only one to have taken a quoted company off a full listing, on to the Junior Alternative Investment Market, only to then restore it to the Main Market again – and indeed, he may well be. The rehabilitation process has been completed and it is entirely appropriate for it to be in the FTSE 250. Focusing on oil, gas and other resources, it is well positioned to win significant orders and recent trading statements indicate healthy growth in the second half of this year. Hold.

Raising $800m from shareholders at the beginning of 2010, Autonomy intended to acquire an unspecified company. Yesterday's purchase of the digital storage assets from Iron Mountain is not that deal and most of that cash still remains. Involved in online storage of information, Autonomy now has a combined 25 petabytes capacity in cyberspace. A petabyte is apparently the equivalent of 20 million four-drawer filing cabinets and the deal is expected to bring profits from next year. Shares are currently approaching the top end of their erratic trading range and a hold is recommended, pending further developments.