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.
Tips: Catch up on all the magazine and newspaper tips
The Times
Capita Group, the FTSE 100 white-collar outsourcing specialist, this year notches up its 20th year on the stock market. At 657½p, or 17 times earnings, the shares look expensive – but not given a return on capital and earnings growth of close to 20%. Hold.
Ian Burke, the Rank Group chief executive, was well within his rights yesterday when he opined that the gaming operator had “ended 2008 in significantly better shape than it had started the year”. But at 59½p, or ten times 2009 earnings, the scope for recovery makes Rank, a constituent of the Tempus Ten, worth holding.
The Daily Telegraph
It was a bright trading update from RSA Insurance, which yesterday unveiled strong full-year pre-tax profits, a hike in its final dividend and a rather bullish outlook for the future. Now is not a good time to buy new shares, although since RSA remains a solid business, investors already sitting on the shares should hang on. Hold.
Capital, which runs back office systems, said in the first seven weeks of 2009 it has won £610m worth of new contracts. This compares to total revenue last year of £2.4bn. The shares are not exactly cheap, trading on a forward multiple of 17 times, but with the dividend 2.31 times covered, investors should buy on weakness.
THURSDAY
The Times
Full-year figures from Bodycote, the heat treatment engineer, shares in the mid-cap company, which have fallen nearly 60% since September. With more than £500m of sales, Bodycote has scope to throw off substantial cash should it be able to sustain double-digit margins. A sustainable dividend yield of 8% is attractive. However, even at 108p, or six times 2009 earnings, there will be better times to buy.
A&J Mucklow is now Britain's second-biggest industrial real estate investment trust, behind Segro, the former Slough Estates. Given that the company has locked in its borrowing costs at 5.5%, the ability to buy well-let properties at yields of nearly 9% provides a clear opportunity. At 235¾p, or a 20% discount to NAV, and yielding 7.5%, hold on.
The Daily Telegraph
Cadbury posted a 57% increase in pre-tax profits to £400m, aided partly by currency movements. It also reported strong growth across its emerging markets and key brands. Yesterday's 6% increase in its total dividend to 16.4p mean the shares have a yield of 3.1% and trade on a multiple of 18 times earnings. This falls to 15 times next year's forecast earnings. The shares look more affordable. Buy.
Bodycote International, the metals engineer, has seen its share price tumble sharply over the past two years. However, investors who followed advice to hold onto the shares at 96p would be pleased to see Bodycote lift its total dividend 3.8% to 8.3p. With the shares currently yielding 7.6% and trading on 6.5 times forecast earnings, there are signs of the group stabilising. For the bold, buy.
WEDNESDAY
The Times
Spectris's 11% increase in its final dividend suggests a level of confidence in its near-term prospects that the stock market doesn't share. Its sales are susceptible to a prolonged downturn in industrial investment, but, at 434½p, the company's strong position, give reason to hold.
Elementis's profit warning yesterday did little to dispel the view that the company is one of London's diminished band of quoted chemical companies. However, at 33¼p and yielding at 8.7%, much of the gloom is priced in. But, with little to drive the shares higher for now, they are best avoided.
The Daily Telegraph
Morgan Sindall, which fits out offices and provides affordable homes and infrastructure services, posted an 8% rise in pre-tax profits to £62.3m. Investing in the construction sector is undoubtedly a risk in these turbulent times, but with the shares trading on a price-earnings ratio of 4.5 times, a lot of this risk is already priced in. Buy.
There was little new information in yesterday's full-year results to really get shares in St James's Place moving higher, although as ever, senior executives at the wealth management group expressed optimism about its future. When the economy picks up, St James's should be well placed to benefit. Hold.
TUESDAY
The Times
Companies such as Bunzl are tailor-made for these times. Demand for its unglamorous range of products – plastic cutlery and trays, paper cups, carrier bags, cleaning materials and builders' hard hats – should be relatively immune to the downturn because they are not easily cut from spending plans. Two months ago, when shares were 590p, Tempus said that it was not yet time to buy; now may be the time. Pass
To look at its share price chart, Brammer had an awful 2008. Shares of Europe's leading supplier of bearings, power transmission and fluid power products crashed from a peak of 310p in May to 90p just before Christmas. At present, and priced for an apocalypse, the shares offer an historic yield of more than 8%. They are a solid hold for value investors.
The Daily Telegraph
For a company which works in the construction sector, Morgan Sindall was full of surprises yesterday as it unveiled a record set of full-year results. The group, which fits out offices and provides affordable homes and infrastructure services, posted an 8% rise in pre-tax profits to £62.3m. But with the shares trading on a price-earnings ratio of 4.5 times, a lot of this risk is already priced in. Buy.
There was little new information in yesterday's full-year results to really get shares in St James's Place moving higher, although as ever, senior executives at the wealth management group expressed optimism about its future. There may be little to spur the shares on in the short-term as market conditions continue to be tough, but when the economy picks up, St James's should be well placed to benefit. Hold.
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