Newspaper and magazine share tips

 

Each day we round up share tips from national newspapers and investment magazines. For the Mail on Sunday's stock picks, read the Midas column.

Newspaper's

Round up: We round up the latest share tips from national newspapers and investment magazines

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FRIDAY

Investors Chronicle

Tate & Lyle have undergone a major board shake-up over the last 18 months, replacing its chief executive, chairman and finance director. New boss Javed Ahmed saw shares jump at his imminent arrival. Disposals have seen debt predicted to have fallen by £490m by the year-end. Shares offer a dividend yield of over 5% and further debt improvement should underpin a return to dividend growth. This recovery story is a buy.

CPP offers a service where following a wallet or bag theft, you can make one call to them and all the cancelling and replacing headaches are managed by them, down to key replacement. It only floated on the main market in March but already has a 57% share of the UK card protection market. It also offers security against identity theft and a mobile phone insurance service. It boasts customers in Europe, North America and Asia Pacific, showing an opportunity for growth in emerging markets. Buy.

 

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The Daily Telegraph

Group NBT provides domain names and internet related services to major corporations. In the year to June 30, revenues rose 6% to £43.9m and pre-tax profits rose 42% to £7.2m. Shares are trading on a June 2011 earnings multiple of 14 times, falling to 12.8 in 2012. Excellent growth opportunities make these a buy.

Funeral group Dignity is finalising a bond issue that will see 100p a share being returned to investors. Shareholders need to approve the move but this looks likely. Shares are trading on at 15.9 times December 2010 earnings, falling to 14.6 next year. The shares are now at a pre credit crunch level and whilst they are likely to fall after the return, they are a hold.

The Independent

Inmedia, which provides bespoke radios for shops, reported yesterday that its first-half operating loss had widened to £100,375. The chief executive Bruno Brookes, a former Radio 1 DJ said the results reflected “difficult conditions” in the UK market. Shares are now sitting at 9p, with little prospect of an upside. Whilst Brookes said the company have slashed costs and will be launching anew service at the end of the year, this is a sell.

Shares in Songbird Estates, which owns most of the Canary Wharf complex in London, fell by about 7% last night following the release of their half-year figures. They announced a fully underwritten open offer to raise net proceeds of £135m, which will refinance a £135m shareholder loan. This will enable them to simplify the balance sheet. Buy.

The Times

John Lovering was brought in to chair the board at Mitchells & Butlers in January, with a plan to sell non-core assets, improve the margins on core assets and boost brands like Harvester and Toby through conversions and acquisitions. Yesterday's full trading update showed a job well done. It's ahead of schedule on disposals and has completed 54 conversions. Retail operating margins are forecast to reach 16.5% for the full year, up from 15.3% the previous year. A solid hold.

Whilst United Utilities was a spread of global assets with two core utility businesses, electricity and water supply in the North West, under Philip Green, this diversification has been undone. There is also a requirement to cut bills by 4.3% in the current financial year, following the settlement with regulator Ofwat. But the yield is very attractive at over 5% so this is a hold.

THURSDAY

The Daily Telegraph

Catlin, a large player in the Lloyd's of London insurance market saw its profits fall 64% in the six months to June this year, owing to losses from the Chilean earthquake and the BP oil spill. However, these losses are common in a market where profits are affected by natural disasters. The company now covers about 30 different types of risk and operates in 17 countries. The shares have an impressive yield at 7%, making these a buy.

Imperial Tobacco may have suffered due to higher tobacco leaf costs and a struggling economy in one of its key markets, Spain, but it does not look like the company will lose its reputation of robust earnings. A dividend yield of 4.4% is not unimpressive, so this is a buy.

Shares Magazine

Coal-to-Magnesite group Beacon Hill Resources have struck a $55m deal with an Indian coke manufacturer, due to be completed this week, leaving share prices looking very cheap. It is believed the valuation gap will quickly close as the market realises its progress in building up mining operations. Buy.

Telit Communications is a key supplier of wireless communications technology to the growing machine-to-machine industry. Shares have jumped 142% in the last year and its half-year results announced in September showed a 61% increase in revenue. They are aiming to up their market share to 16% this year through acquisitions and organic growth. Buy.

The Independent

Gulf Keystone Petroleum have seen stock rocket by 85% in the last few months as they announced they are hoping to extract up to 10,000 barrels a day from its Shaikan block. The shares may not increase at the degree they have in recent months but investors are still likely to make money. Buy.

US online advertising sales group, Burst Media has been struggling this summer. Problems at Giant Realm, an acquisition targeting a younger audience caused shares to drop almost 30% when performance issues were revealed in July. The company is making a loss, and shares have never been close to their 82p placing price. An uncertain future makes this a sell.

The Times

Redhall Group yesterday bought Mount Engineering for £16.4m. The chairman, David Jackson, says the Mount deal increases their exposure to overseas markets and to oil and gas before the expected upturn next year. Shares sell on a little more than seven times future earnings, but Jackson admits that Redhall need to triple in size to be taken seriously.

Mining company Petropavlovsk will be floating its non-precious metals business IRC on the Hong Kong stock exchange. The float is being launched on September 30 and priced a week later. Its mines have yet to turn a profit, but the deal leaves the company focussing solely on gold.

WEDNESDAY

The Daily Telegraph

In the year to June, Petra Diamonds pre-tax profits jumped to £44m from a pre-tax loss the previous year. It is on track to more than double diamond production by 2014, and triple it by 2019. Shares are trading on a June 2011 earnings multiple of 17.3, falling to 10.5 next year. The rise in wealth and interest in diamonds in the Asian market is having a positive effect on future demand growth. Buy.

In the six months to June, Biocompatibles moved into a pre-tax profit of £1.14m from a pre-tax loss of £857,000 in the same period the previous year. The company has developed a new cancer drug and has revealed it has received a bid approach. There is no guarantee that a bid will happen and if it does not, shares will fall. But for now, they're a hold.

The Times

The settlement between Sportingbet and authorities in the US means that they will be able to re-enter the biggest gambling market, the US, when the ban introduced in 2006 is lifted, which is looking likely. Chief Executive Andy McIver conceded that this removes a barrier to a takeover and names like Ladbrokes are already being mentioned. Buy.

Park Group collects payments from its customers and returns the money to them at Christmas in the form of retail vouchers, easing the spending strain. It has announced that orders are running at about 10% more than last year. It has also branched out into pre-paid vouchers to corporations to be used as incentives. It also received a £4.4m payout from HMRC for overpaid tax this summer. Buy on weakness.

The Independent

The chain of funeral directors Dignity is expected to raise £87.1m from new secured notes and of that, is planning to return £63.9m or £1 per share to investors. A broker suggested that a return of cash this size could be made to shareholders at least every three years. Dignity is looking like an income generating investment. Buy.

Property developers Minerva own the Walbrook, one of London's biggest unlet office blocks. Whilst the value of its portfolio is up 17.4% in the year to June, the 173% gains in the past 12 months have significantly slowed. Renewed concerns about the recovery in the property market make this a definite hold.

TUESDAY

The Daily Telegraph

BP finally announced yesterday that the oil spill has now been sealed, causing shares to rise. Shares are still trading at 37% below their price on April 20 when the oil spill happened. However, the final clean-up bill remains unclear and the company still faces many challenges. Despite a new CEO and the hope that the dividend could be reinstated by the end of the year, this is not certain. For now, it's a hold.

Brit Insurance looks set to be bought by US firm Apollo and CVC Capital Partners after an improved bid of £870m was put forward. The offer of £10.75 a share also includes a provision that means shareholders would receive another 25p a share if Brit Insurance's net tangible asset value exceeded more than £11 per share at the end of 2010. Whilst UBS analysts believe there is a good chance of that happening, the Telegraph thinks that they should bank their profits now. Sell.

The Times

The rail division of Invensys has struck an agreement with Chinese company CSR Corporation this week, which would put its train signalling equipment into the huge Chinese market. Whilst any benefits will not be seen until the end of 2011 at the earliest, analysts at UBS think CSR holds about half the Chinese market and if Invensys win half of the £500m a year signalling market, it could provide revenues equivalent to 25-30% of the rail division's annual orders. Despite fears of a slowdown in the UK due to public spending cuts, indications are that work already committed will go ahead. Buy.

Rank Group has been focussing on its core businesses, bingo and casinos with good results. Its Mecca bingo clubs have been reinvented as Mecca Full House venues, and at the end of July the first increase in visitor numbers for more than a decade was reported. After problems due to the smoking ban and rule changes on gaming machines, analysts believe that Rank Group is ready to deliver sustainable growth. Hold.

The Independent

Hochschild Mining, a Peru based gold and silver producer has risen along with the rest of the mining companies, its shares have put on 45% plus in the last six months. Gold and silver prices are rapidly shooting up making this is a definite buy.

RM, a company providing computer hardware and software to schools has had a difficult year, mainly due to cuts in education spending. But since August, RM has won many contracts and said yesterday that its financial year has been consistent with market expectations. The company is also looking abroad to ensure UK cutbacks don't create too big a problem. Its dividend is valued at 8 times estimated 2011 earnings. Buy.

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