Newspaper and magazine share tips
Each week we round up share tips from national newspapers and investment magazines. For the Mail on Sunday's stock picks, read the Midas column.
Magnum manufacturer Unilever is a 'hold'.
The Daily Telegraph
Old Mutual, the London-based insurer, didn't have much to celebrate yesterday. Assets under management collapsed 6.5% to £261bn due to the market mayhem, as investors sought safer havens for their funds. However, it is the least expensive UK listed insurer, trading on 7.3 times earnings with a 6% dividend yield. Hold.
Lonmin was saved by the platinum price yesterday. The miner's first half results showed a 44% increase in revenues to $907m, with pre-tax profits jumping 200% to £396m. After a 6% rise yesterday, the company's shares edged slightly higher than the £33.27 level at which Questor recommended selling back in October. Even with record results and with the shares appearing cheap, we see little reason to change our stance in the current period of uncertainty and advise investors to seek better value elsewhere in the mining sector. Avoid.
The Times
Shares in Unilever, the maker of Marmite and Hellmann's mayonnaise, gained more than 5% yesterday as it reported first-quarter organic revenue growth of 7.25%, beating expectations of a 5.9% increase and marking the fifth consecutive quarter in which sales have risen by more than 5%. There is also the concern that investor enthusiasm will wane as the company's restructuring nears completion. However, at £17.52, or 15 times 2008 earnings, Unilever's recovery remains on track. Hold.
Next yesterday reported an 8.9% plunge in first-quarter like-for-like sales and its shares surge 6%. Next's vigorous expansion of new space has put pressure on sales densities, and H&M and Primark are formidable foes in a slowing economy. However, with profits over the next three years still forecast to fall, there is better value elsewhere. Avoid.
Investors Chronicle
Anglo American's chief executive, Cynthia Carroll, has transformed relations between the company and the South African government. The shares are looking more attractive than some of their peers as they are less vulnerable to a fallout from the hard commodity process. Despite putting some of their disposal programmes on hold it has managed to maintain its platinum production targets. Buy.
Cookson, whose profits are closely linked to steel production, looks set to benefit from increase in global steel production, which rose to 7.5% in 2007. Despite its exposure to consumer electronics its shares are rated at 10 times 2008's forecast earnings. Buy.
THURSDAY
The Daily Telegraph
British American Tobacco, the world's second-biggest operator, yesterday said pre-tax profits had risen 18% in the three months to the end of March. Emerging markets such as Russia and Poland are continuing to grow strongly, suggesting that BAT should be well-placed to resist a downturn in the developed world. The stock trades at a slight discount to rival Imperial and yields more, suggesting there is still value to be had even after the recent run. Buy.
Anglo Irish Bank revealed an 16% increase in first half pre-tax profit to €667m (£531m) yesterday made it a model institution, especially as that came after a €190m credit market hit. Anglo Irish also has a very tight control of costs and expects to generate €1bn of capital this year, which will lift its 5.6% core tier-one capital ratio above 6%. On 6.5 times forecast earnings and a 2.5% yield, it still looks a pretty investment. Buy.
The Times
BHP Billiton's oil division is challenging to become a major player in its own right. It is now the world's largest producer and could break into the top ten in the next few years. BHP has failed in the past to capitalise on its position but should now be able to benefit from both rising metal and oil prices. Hold.
The Restaurant Group, which runs chains such as Frankie & Benny's and Garfunkel's, yesterday released a statement showing like-for-like sales growth of 5% in the 18 weeks to May 4. With like-for-like comparisons due to get easier, debt negligible and the shares, up 15% at 169p, TRG is worth buying on weakness.
Shares Magazine
The business class only airline, Silverjet has frequently been criticised about its financial position over recent months. However, it is attempting to make amends after entering into a memorandum of understanding (MOU) with a UAE-based investor. The MOU provides that approximately $25m will initially be invested directly in Silverjet by means of debt and equity. Hold.
WEDNESDAY
The Times
If a high dividend has been the perennial attraction of Lloyds TSB, the credit crunch has also showed that payout to be the bank's greatest protector. The prospective yield is 8.6% on a payout that is covered some 1.4 times by forecast earnings. Lloyds's ability to manage through tough times implies that at 439p, or seven times 2008 earnings, it remains a relative safe haven. Hold.
Shares in the hedge fund manager, RAB Capital fell more than 15% after it gave warning that first-half profits would be significantly lower than last year. There is reassurance that RAB still holds a large slug of cash: equivalent to about 29p a share, or more than half of its stock market value. However amidst market volatility and nervousness from investors the shares, even at 52¼p, are best avoided.
The Daily Telegraph
Tullow had predicted that Jubilee contained 170m barrels of oil, with a best-case of up to 1.38bn. Analysts now think Jubilee could contain 500m at least, and up to 1.8bn. Tullow is a good long-term play. Hold.
First-quarter revenues from Playtech, the company that makes software for online gambling sites, were almost 100% ahead of the same quarter last year and almost 20% ahead of the fourth quarter of last year. With revenues for April around 9% higher than the monthly average, analysts were quick to upgrade forecasts, which put the shares, after the recent strong run, on 18 times 2008 earnings. Buy
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