Sunday share tips: Gear4Music, Just Eat, Direct Line
By Digital Look
Date: Sunday 28 Oct 2018
(Sharecast News) - A round-up of Sunday's newspaper share tips, including Gear4Music in the Mail on Sunday, Just Eat in the Sunday Times and Direct Line in the Sunday Telegraph.
Gear4Music was tipped as a 'buy' by Midas in the Mail on Sunday, which is down by around a third from its all-time high last year and down 21% in the past four months. The online music retailer is the largest of its kind in the UK, as well as operating 20 websites in 15 languages around the world, which means around 45% of the company's sales come from the UK. The global music retail market is calculated to have a value of around £12bn, with annual European sales of more than £3.5bn.
Last year, profit before tax fell to £1.5m from £2.6m due to increased investment, with more than 45 software specialists working on the company's technology and a team of music experts rocking customer services around the clock. For the current year to 28 February 2019, the AIM-listed company is forecast to drum up revenues of £110m. In the first half of this year, sales increased 36% to £42.5m, but EBITDA shrank 9% to £0.7m. International sales jumped 39% to £5.2m, though the company has committed to increasing European stock levels in order to increase revenue further in the near future.
In the Sunday Times' Inside the City column it was suggested that it "may be time" for Just Eat again. Shares in the online takeaway food marketplace have fallen by almost a third since late July, sitting at a 14-month low. Just Eat is, at 601.8p, trading at its lowest ever p/e ratio, of 28 times forecasts earnings as many investors have lost their appetite for the shares over the threat from Deliveroo and Uber Eats, with merger rumours abounding.
FTSE 100-listed Just Eat has pointed out that its rivals generate most of their revenues in London, while 86% of Just Eat's UK revenues are made in the regions.
In July's interim results, almost half of turnover came from outside the UK and directors raised overall revenue guidance to £740-770m as investment plans were bumped up yet higher to £55-60m to target "long term growth".
Direct Line was a 'hold' for Questor in the Sunday Telegraph, with the insurer's shares down 17% since the start of April.
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