Sunday share tips: Debenhams, Johnston Press, Carpetright
Date: Sunday 22 Jun 2014
Steer clear of shares in Debenhams, Questor advised in the Sunday Telegraph. There was no repeat of the December 31st profit warning when the department store group published its trading statement on June 20th. Trading was in line with expectations. But Debenhams has damaged its brand by repeatedly cutting prices. Opening up stores to Sports Direct concessions looks confused. Add in the company’s high debts and the shares are best avoided.
Johnston Press’s prospects may not be as grim as its battered share price suggests, Danny Fortson said in his Inside the City column. The Sunday Times tipster said the regional newspaper publisher’s recent fundraising was backed by canny investors including Malaysian billionaire Ananda Krishnan and BSkyB. Johnston sales staff will sell Sky’s ad slots to local businesses. Chief Executive Ashley Highfield has a credible plan for the company in the digital age and Johnston is a “decent punt” for those with strong constitutions.
Hold shares of Carpetright, Danny Fortson said in the Sunday Times. In his Inside the City column, Fortson said the departure of founder Lord Harris, leaving Carpetright with newcomer Chief Executive Wilf Walsh, made it an unknown quantity. The shares have fallen as Carpetright has issued three profit warnings and its business in the Netherlands remains a problem. The revival in the UK property market has failed to feed through to Carpetright’s business as hoped. The shareholder register is highly concentrated with room for greater share price disruption if a big investor becomes disaffected.
Midas in the Mail on Sunday admitted its dividend surprises portfolio had taken a knock after six of the 10 shares fell since its last quarterly review in February. However, the rolling group of shares has outperformed the FTSE 350 index. The tipster urged investors to bear with the portfolio, which is designed for the long term. The 10 companies’ dividend payments were those that most exceeded broker forecasts, suggesting good things were in store. New additions are Xaar, the 3-D printing company; copper miner Antofagasta; buyout group 3i; and Quinetiq, the defence IT group. Premier Oil, Man Group, Bank of Georgia and Howden Joinery have left the portfolio. Berkeley Group, Northgate, Ashtead, easyJet, Drax and 888 have stayed in the portfolio.
Investors with a taste for risk should buy shares of AIM-listed wind-power company Greenko, Questor recommended in the Sunday Telegraph. The India-focused operator’s revenue rose 38% and pretax profit jumped 70% in the year ended March 31st as power-producing capacity at its wind farms more than doubled. India has serious power shortage problems and Greenko has commissioned new capacity. The company is a high-risk speculative buy.
SF
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