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.
Times: Shell, the world’s second-largest listed oil company by valuation is a colossal cash cow.
The Times
Shell, the world's second-largest listed oil company by valuation is a colossal cash cow but it is struggling to replace its reserves and sustain output. Oil is hardly a luxury item that consumers will pass up altogether in tough economic times. Many believe that the recent slide in prices will be seen merely as a temporary lull. Shell's shares, off 70p at £16.35, could be well placed to prosper. Buy.
Half-year numbers from Luminar make grim reading. The nightclub operator suffered a 5.2% all in like-for-like sales in the past eight weeks compared with a first-half decline of 1.9% while it was forced to write down its stake in 3D Entertainment, the Chicago Rock Café operator, by £24.1m. Existing shareholders can be comforted by the strength not only of Luminar's operations but also its financial position. However, despite the plunging share price, there may be better times to buy. Avoid.
The Daily Telegraph
Despite the share price rise, WPP yesterday followed other advertising groups such as Aegis in issuing a cautious outlook for 2009, with marketing budgets expected to be cut back in 2009. WPP should additionally benefit from its exposure to the dollar. However, the unpredictable nature of the advertising market at the moment means this one should be treated with caution. Avoid.
Standard Life yesterday became the latest insurer to insist it was in good financial health, although its nine-month worldwide life and pensions sales proved to be something of a disappointment. The Scottish insurer unveiled pension sales of £12.4bn, creeping up from £12.3bn. Analysts, meanwhile, had a consensus prediction of £12.6bn. Standard Life is better positioned than rivals to see out further market volatility. Hold.
Investors Chronicle
Taylor Wimpey used to boast that it was Britain's largest housebuilder. Its share price has plummeted 96% in a year due to the terrible housing market in the UK, Spain and the US. But, investment bank Merrill Lynch thinks that, even after all the writedowns, there is still 37p a share of net asset value id the borrowing covenants can be rewritten. Buy.
THURSDAY
The Times
RPS Group, Britain's biggest environmental consultancy, has grown profits in each of the past 17 years and shows no signs of breaking that run. However, its shares have halved in the past three months. At 141p, or seven times next year's earnings, hold.
Communisis, the printer and dispatcher of bank statements and chequebooks, yesterday offered reassurance that trading is 'comfortably' in line with forecasts. The recent disposal of the business stationery division has removed the group's lowest-margin operation and cut debt to £16m. At 40½p, or six times 2009 earnings, and yielding 6.4%, hold.
The Daily Telegraph
CSR, a chip-maker for Bluetooth wireless devices, saw its share price climb more than 20% at one point yesterday as it posted its third-quarter results. Despite rumours, there is no guarantee of a Nokia deal, for now, investors should tread cautiously. Hold.
Insurer, Advent Capital fell into the red yesterday, reporting a pre-tax loss of £1.9m for the nine months, compared with a £12.9m profit the previous time. Advent is trading on about five times forecast earnings, in line with the sector, but due to the Fairfax stake, better returns may now be found elsewhere in rivals such as Hiscox. Take profits.
Shares Magazine
Northgate, the leading light-commercial-vehicle rental company in the UK and Spain, is seeing the bottom drop out of the van rental market. Its shares have crashed from a peak of just over £12 in 2007. Last years dividend payment of 28p does not look sustainable in the current environment. Sell.
WEDNESDAY
The Times
ARM Holdings, which counts most of the world's semiconductor makers among its customers, announced its third-quarter results yesterday and sent the group's shares up more than 21%. The lagging nature of ARM's royalty revenue stream means that it could just take longer for the group to feel the pinch. That said, ARM's business model is solid, and the trouble is the uncertain times. Hold.
Cineworld, the UK's second-largest cinema chain, yesterday reported a better than expected 2.2% rise in total revenues in the 43 weeks to October 23. Although its shares look cheap at about 7.5 times earning, the risk remains that, as budgets tighten, filmgoers will buy less popcorn and pop, and advertisers could also curb spending. Hold.
The Daily Telegraph
Aviva, the UK's largest life assurer's third-quarter management statement was littered with positive comments. Yesterday, the shares bounced up to 288p at one stage in response to the upbeat statement, and a better-than-expected 12% rise in new life and pensions sales. With Aviva stating that its progressive dividend policy is firmly intact, the shares are yielding 13.8%. Hold.
On the face of it, ARM Holding's record quarterly revenue and jump in profits gives technology investors an opportunity to smile amid the black clouds closing in on the sector. Although the company expects a 'robust' fourth quarter and continued growth in 2009, it is likely to be hit by the downturn currently hurting its customers. Hold.
TUESDAY
The Times
Reckitt Benckiser, best known for cleaning products such as Cillit Bang, delivered a suitably spotless set of third-quarter results yesterday. Net revenue to date is up 15% year-on-year on a like-for-like basis. The group is increasingly standing out as a sound defensive choice in unprecedented times. Hold.
Hydrogen, the City recruitment specialist, could see its bubble burst soon as half of its business comes from the financial sector. Analysts cut forecasts by a third and the company's shares plunged by more than 30%. Although the group's shares trade at a discount to peers there is little on the horizon to offer support and investors would do better to ride out the downturn with larger rivals. Avoid.
The Daily Telegraph
Reckitt Benckiser, whose portfolio of brands includes Vanish, Strepsils and Harpic, may not be the sexiest of companies, but as a defensive play in a difficult world, it is among the most attractive of FTSE picks. At 16.5 times 2009 earnings, Reckitt is not cheap, but against a dizzying lack of alternative investment opportunities, this looks like a good place to be. Buy.
Lancashire Holdings, a Bermudan-based insurer which provides insurance for natural disasters caused to properties and oil rigs as well as aviation risks, has now posted its first quarterly loss. The shares are yielding just 3.3% before factoring in any changes to the dividend policy. There could be better opportunities to get in later. Avoid.
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