LONDON (ShareCast) - Be wary of Home Retail’s revival, Danny Fortson advised in the Sunday Times. The owner of Argos and Homebase has surprised investors by turning itself into a click-and-collect powerhouse, combining online sales with Argos’s branch network. First-quarter trading numbers should be strong on June 10th. But in his Inside the City column Fortson said Argos does not sell anything distinctive leaving rivals to emulate its move into bricks and clicks. Home Retail trades at a 20% premium to its competitors. Rising labour costs in China, where the company spends more than half its cash, could also dampen the revival.
Buy shares of Bellway, the housebuilder, Questor recommended in the Sunday Telegraph. Reservations have been boosted by the Government’s Help to Buy scheme and growth is slowing but Bellway is still in a strong position. Its volumes are growing and sale prices are increasing. The recent trading update was strong and the company looks like hitting its target for pretax profit of £223m for the year that finishes at the end of July. The shares are marginally cheaper than those of its rivals and with Help to Buy carrying on Questor recommends buying Bellway.
After more than 20 years trying to build a luxury hotel complex on Crete, Minoan Group is on the verge of success, Midas wrote in the Mail on Sunday. As a result the shares, priced at 14p, should go a good deal higher in the next few years. Its UK travel business is doing well and the Cretan project is finally primed to go after years of planning hassles. The shares are still risky but investors with an appetite for adventure should take a punt, the tipster said.
Breon Corcoran, the Chief Executive of Betfair, is more likely to make acquisitions in the US than to return the online bookie’s £200m of cash to shareholders in a special dividend, Danny Fortson said in the Sunday Times. Analysts at Numis have advised caution, saying Corcoran should retain the cash. Having done well since taking over nearly two years ago, he should bide his time.
Blue-collar recruitment company Staffline Group’s shares have risen from 239.5p to 930p since Midas recommended them in the Mail on Sunday in November 2012. Investors who bought then may be tempted to sell 30% of their stakes but they should hold on to the rest because Chief Executive Andy Hogarth has met his targets over many years. For new investors, the shares should bring rewards over the next five years, the paper’s tipster said in an update on the company.
Hold on to shares of VP, the engineering equipment rental company, the Sunday Telegraph’s Questor tipster said. Management is confident about the outlook and VP is a solid performer. But the shares, trading on 17 times forecast earnings, are ones to retain but not buy, even though VP is diversified and should gain from economic recovery.
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