Sunday newspaper and magazine share tips

By This Is Money
Updated: 10:18 EDT, 3 April 2011

We round-up the weekend share tips, looking at Compass, Aveva, CPP, Barratt and Firestone Diamonds

Sunday Telegraph

Compass - the world's biggest catering company - last week said it expected a £5m hit to its operating profits from the earthquake and tsunami in Japan. But robust growth elsewhere in the business is expected to shield the group from downgrades.

Compass, which provides catering at famous venues including Chelsea Football Club and the Wimbledon tennis championships, said revenues grew by 9.5% on a constant currency basis, while total organic growth in the second quarter was up 5.5%. The Surrey-based firm also reported improving profit margins - a good performance in light of soaring food price inflation.

This comes after success in passing on costs to its customers as well as canny 'menu planning' to avoid using expensive ingredients. It has also continued to see a strong recovery in the US, which is helping offset ongoing challenges in the UK and Europe.

Shares, currently at 564p, have soared by 84% since the end of 2008 and investors are advised to buy to tap into further potential upside.

Financial Mail on Sunday - Midas [Read the full Midas column here]

This year's royal wedding fever spells good news for Firestone Diamonds, which mines in Lesotho and Botswana. The marriage between Prince William and Kate Middleton is expected to make for a busy wedding season - and no proposal these days is complete without a sparkler.

Demand for diamond rings is soaring in western economies, while emerging markets such as India and China are fast catching up. This bodes well for companies such as Firestone, which joined the Alternative Investment Market (AIM) in 1998 and in 2005 appointed Tim Wilkes, a former director of diamonds giant De Beers, as chief operating officer. He was promoted to chief executive last week after having succeeded in growing the business and switching the focus from exploration to production.

The Lesotho mine, which started production a few weeks ago, is causing much excitement at the group, with Firestone having already unearthed three high-quality gems from it.

As production is costly given all the upfront expenses, brokers do not expect Firestone to make a profit this year. But they forecast profits of £10 million in 2012, rising to £22 million in 2013 and £37 million in 2014. As with all small mining firms, there is an element of risk, but one worth looking at for many investors.

The Sunday Times

Aveva, whose software is used to design power stations, ships and oil rigs, has had its shared marked down 2.5% since the earthquake in Japan struck. Despite Japan's woes, the truth is that there is little alternative to nuclear. If the oil price doesn't plummet, and shipping continues to recover, there is now reason Aveva can't carry on performing.

It was a dismal week for CPP, the identity protection firm. It's shares dived 44% after the announcement of an FSA investigation into the sector. CPP trades in 15 counties and also sells services such as mobile phone insurance and legal advice.

Barratt is close to replacing its £1.6bn debt facility with a three year loan deal for about 1.3bn, on improved terms that it will cut its annual interest bill by £70m.