Newspaper and magazine share tips

 

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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

Banking giant Barclays has revealed uninspiring trading for the first quarter of 2011. Reflecting what management describes as a 'subdued macroeconomic environment,' total income fell 8% on 2010's first quarter. Also this month, Barclays revealed that it would take a £1bn hit to cover compensation payments for PPI mis-selling. The shares, trading on 10 times broker Investec Securities earnings forecast for 2011, look highly rated. The doubts over Barclays' growth prospects and the regulatory challenges ahead make the share price look vulnerable. Sell.

A decade ago, French Connection had the fashion world at its fingertips. Its controversial Fcuk advertising had taken the fashion industry by storm. The once-novel marketing soon looked tired and tacky, and French Connection's financial performance deteriorated. There is still work to do in its UK retail operation, however, which reported a 1.8% drop in like-for-like sales in the first quarter. The share rating – at 11 times forecast earnings – is well short of Ted Baker's rating. True, it doesn't have Ted's recent record, but, then again, it is a recover story. Buy.

 

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The Daily Telegraph

Full year numbers from Shanks, the recycling and waste management group, were good and there seems to be signs of improvements in its end markets which should help boost profits this year. The group also recently won a three-year contract with consumer goods giant Unilever to manage all of its waste in Belgium and the Netherlands. In the year to March, revenues rose 5% to £7.17m, with pre-tax profit rising 8% to £21.2m. The total dividend for the year was raised by 8% to 3.25p a share, with the final payment of 2.25p scheduled for payment on August 5. Trading on March 2012 earnings multiple of 16.5, falling to 13.8 next year the shares are a buy.

The specialist marine service group James Fisher & Sons has announced a deal to perform a full refit of the Swedish navy's rescue vehicle. James Fisher also owns a marine oil business that transports oil around the UK. The shares are trading on a December 2011 earnings multiple of 11.8 times, falling to 10.7 in 2012. They were first tipped at 455p on August 16 2009, and gains have been slow but steady since then. They are up 20% compared with a FTSE 100 up 25% with the prospective yield being 3%. Buy.

The Independent

World's leading defence technology and security companies QinetiQ, posted better-than-expected full-year figures, with underlying operating profits climbing 21% to £145.4m, against analyst hopes of around £140m. The company had suspended pay-outs for a year, as it went about restricting itself into three divisions and so cheered income investors by announcing that it would resume paying dividends. QinetiQ stands out, as it offers the prospect of upside gains if the restructuring continues to progress. Buy.

Business is brisk at Endace judging by their full-year results which were released this week. Revenues rose by a quarter to $38.4m for the 12 months to the end of March. Pre-tax profits were up from $400,000 the previous year to $2.9m. The company looks forward to the coming financial year with considerable confidence that the company has the right products, a talented executive team and an expanding market. The fact that a stock trades on multiples of 2.4 times the enterprise value to sales would be enough to make us buy, especially as Endace has more to offer.

The Times

The most interesting thing about Sportingbet's £118.5m cash-raising yesterday to fund the purchase, for the same price, of Australian internet bookie Centrebet International, is the fact that half of it is funded by the new debt. Existing shareholders do not seem impressed. So Sportingbet is issuing £65m worth of shares in a placing and open offer along with the same convertible bonds. Sportingbet has been under pressure to find an acquisition to reduce the amount of its income that comes from unregulated gambling on its website. The shares look cheap, though they have disappointed in the past.

PayPoint appears to have fought off a threat from the National Lottery to its business, which allows the payment of utility bills and mobile phone top-ups at convenient retail locations. Pre-tax profits were up 5.5% at £34.5m, with core revenues 6.9% higher at £82.7m. The growth prospect with PayPoint is that the network allows users to pay for utility bills and mobile phone top-ups. At 7.3% increase in payments to 23.4p this year puts shares up 25p to 495.5p, on a historic yield of 4.7%. PayPoint sell on about 13 times this year's earnings; up with events.

THURSDAY

Shares Magazine

Enterprise business software specialist Globo has its roots in more traditional e-commerce software solutions aimed at small and medium-sized businesses, but the future is all about mobile and CitronGO!, the mobile platform launched last year. CitronGO! Is a clever software suite that makes standard 'feature' mobile handsets smart. The potential on offer here should drive rapid earnings growth and merit a re-rating of the shares, which could well offer upside of some 80%. Buy.

Vectura develops inhaled therapies from existing drugs for the treatment of respiratory diseases. IT then out-licenses them to big pharmaceutical companies, in return for milestone payments and a share of royalties. This a relatively low risk approach and one that seems to be progressing to eventual success. Buy shares before likely positive news over the next few months sends the shares rocketing upwards.

The Daily Telegraph

For the past three years the world has lurches from one crisis to another. This has led to extreme market volatility – to the benefit of inter-dealer broker ICAP. Most observers expect that volatility to continue. Recent results were solid. In the 12 months to March, revenues rose 8% to £1.7bn, but pre-tax profits fell 6% to £233m after it took a £14m charge on acquisition. ICAP shares were first recommended as a buy at 326.6p on February 16 last year and they are up 46%, compared with the FTSE 100 up 11%. The shares are once again a buy after a recent weakness.

There have been two important pieces of news since Questor gave the last update on Gem Diamonds. The group has issued the first update of its diamond resources since it listed and a potential M&A situation is now over. The total diamond resources contained in Gem's mining operations stand at 28.89m carats. Based on an average price of $536 a carat, this values the total resources at £9.5bn. Trading on a current year earnings multiple of 17.3, falling to 14.4 next year, the shares remain a hold.

The Independent

Software Company Aveva are not the most well-known software company around, focusing mainly on engineering software particularly in the oil, gas and power markets – but its strengths are plain to see in the full year results. Revenues were up 17% at £174m, while adjusted pre-tax profits came in at £54.7m, up from £50.7m last year, with the oil and gas sector accounting for around 45% of total revenues. We would, needless to say, not think twice about rushing in if the share price suffers a pullback in the coming months. Hold.

Small-cap software group, Innovation beat expectations with its figures suggesting that the new strategy is working very well. The company's pre-tax profits for the period grew to £6.3m – a year-on-year rise of more than 150%, while its revenues advanced about 12%. After a multi-million pound investment in their software, the company seem to reaping the dividends – striking deals with Ford and Tesco within the last six months. The results certainly seem to validate the new team's approach, although there is still work to do, they seem to be building on the right track. Buy.

The Times

Hogg Robinson, which arranges corporate travel, is well positioned to help passengers affected by the new ash cloud. Although business travel is one of the first to be hit by the economic downturn – less business means less travel, the firm took immediate action, cutting its cost base by 20%. As dividends grow faster than those of reduced costs, the company was able to report pre-tax profits 16% higher at £32.9m. Hold.

Telecom Plus has a tiny market share of about 1%, with a team of trained distributors to find new customers and a deal with nPower announced yesterday, is significant for the its future. Npower is planning to chip in £3m towards marketing costs which will help search for new business. This will also allow the firm to raise dividends, held at 22p last year despite pre-tax profits 51% ahead at £327.5m. The shares shot to a fresh new high after the news, up 41p to 524p, but still change hands on about ten times this year's earnings. Speculative, if interesting.

WEDNESDAY

The Daily Telegraph

The most anticipated float of the past few years has finally completed. Yesterday, shares in Glencore International started full trading and private investors can now get involved – but should you buy into London's biggest-ever listing? The listing was at 530p – and shares started conditional trading last week. During that time they fell as low as 506p. Looking at last year's revenues of $145bn only resulted in a net profit of $3.8bn – but Xstrata for example, with revenues of a mere $30.5bn produced a net profit of $5.4bn. Avoid.

Utility group Pennon posted an excellent set of numbers yesterday. The owner of South West Water and Viridor, the waste disposal and recycling group, said revenues had risen to £1.16bn from £1.07bn and pre-tax profits rose 1.5% to £188.5m. The shares are up 52% since they were first recommended on February 13, 2009, compared with a market up 40%. Trading on a March 2012 earnings multiple of 16, falling top 14.4 next year, the shares remain a buy for income seekers.

The Independent

Banknote company De La Rue may have a licence to print money, but after a volatile 12 months the shares have not been quite such a sure thing. It released full year results yesterday with pre-tax profit beating analysts' expectations, up 10% to £33m. The dividend was maintained which should reassure many investors. The new boss has drawn up plans to overhaul the business which he believes will lift profits by £100m within three years. With the nice 5.1% yield, we think this one might finally be worth buying into.

Holidaybreak, the education and activity travel group, was a popular destination for investors yesterday, despite its first-half losses widening. Shares took off, in part because of a strong pipeline of bookings at its PGL outdoor activity business for schoolchildren. The group say its educational division is 99% booked for 2011. While the holiday sector is a risky one and subject to major external turbulence, we think that Holidaybreak is worth a punt. Buy.

The Times

Toby Courtauld, the chief executive of Great Portland Estates, admits there is a fair degree of luck as well as judgement behind the commercial property developer's stellar performance. For one, it is entirely in Central London. This is a property market more dislocated from the rest of the UK economy than it has ever been. Second, his company raised £166m from shareholders at the bottom of the market to invest in property, often bought from distressed owners such as banks. At 413p, up 3p last night, they are on a fully justified 15% premium to net assets and are a strong hold.

C&W Worldwide could at last emerge the year to end of Mach with one tangible sign of progress. The company, which provides telecoms to business, did manage to generate £61m of cash against a £1m outflow last time, even if this was not enough to cover that dividend. It is giving clear guidance on what to expect this year and confirming that the 4.5p annual dividend will be maintained until it is covered by free cashflow. Hold.

TUESDAY

The Daily Telegraph

Ryanair saw revenues rise 21% to £3.1bn in the last 12 months and pre-tax profits up 23%. It also carried an impressive 72.1m passengers last year despite the cancellations caused by the Icelandic volcano disruption. Ryanair believes that 'higher oil prices will force competitors to continue to increase fare and fuel charges which makes Ryanair's lower fare prices even more attractive.' It is trading at a price-to-earnings ratio of 10.6 for the year to March 2011, falling to 9.3 next year. Buy.

Although the hesitant global economy means fears of a price war remain, Imperial Tobacco is still holding on strong. The tobacco group want to increase the dividend pay-out ratio to 50% of adjusted earnings from this year, up from 47%. The shares are trading on a September 2011 earnings multiple of 11.2 times falling to 10.3 next year. The shares remain a buy for income seekers, although for ethical reasons, some investors might avoid.

The Times

Mitie, the strategic outsourcing and energy services company, has reassured that 81% of the budget revenue for the current financial year is already secured, up from a more typical level of 75%. Also the order book has grown from £6.4bn to £36.8bn despite underperforming since the beginning of the year. However, its energy sector across Europe is worth £6bn today – expected to reach £20bn by 2020. Trading on less than ten times this year's earnings, hold.

Known for their Integrated Marketing Platform, Alterian has many useful products. But despite this, problems continue to affect its shares. The continuous delay in renewing contracts still stands. There is also the danger of costs spiralling out of control without being matched by increase in revenues. With the delayed launch of new software resulting in extra outlays on research, development and operating, Alterian were left with an operating loss of £4.4m against a £6.6m profit last time. The company retains cash balances of £7m. Profit forecasts have been reduced from £3.2m to £1.7m this year. Sell.

The Independent

Multimodal transport and logistics solutions company Stobart was trading at 17 times forward earnings – which for is more than many investors are willing to pay. Full-year figures saw pre-tax profits fall short of market hopes. But the cause was harsh winter weather conditions causing road and rail closures. The market recognised this was beyond Stobart's control and the share prices rose as the focus turned to the confident outlook statement. The stock is down now more than 20% since the February peak, which makes it undervalued. It's a buy.

British-based pharmaceuticals business Vectura has some impressive figures to show for itself, despite making loss after tax. Losses have been significantly reduced thanks to a deal last year with GlaxoSmithKline, which provides a £20m injection plus royalties when the drugs are launched. Earlier in 2011, Vectura reached 86p having added nearly 160% over the previous nine months. Although it has been tracking slowly behind, the near future looks positive. Buy.