Sunday share tips: Bwin.Party, Afren
Afren
1.79p
16:34 14/07/15
Bwin.party Digital Entertainment
124.00p
16:49 28/01/16
FTSE 250
19,601.98
17:09 25/04/24
FTSE 350
4,434.34
17:09 25/04/24
FTSE All-Share
4,387.94
16:49 25/04/24
Oil & Gas Producers
9,649.24
17:09 25/04/24
Travel & Leisure
7,552.90
17:09 25/04/24
Bwin's tie-up with PartyGaming was premised on achieving such size that it would be better able to compete in the booming markets for gambling and sports betting - but in the event those expectations did not pan out. Furthermore, Philip Yea, who came on board three months ago from 3i, has yet to manage a turn-around in the share price. Hence, investors in Bwin.Party are baying for blood. A special dividend or a partial break-up might appease them. Activist investor Spring Owl recently appointed a member to the board, making a dramatic move more likely. One option may be to spin-off its payment processing arm, Kalixa, which may be worth over £100m to shareholders. At 12 times' forward earnings the stock is cheap and investors want action, "place your bets," says The Sunday Times' Danny Fortson.
Africa-focused oil explorer Afren is set to publish its half-year results this week but those are unlikely to shed a light on what markets most want to know. The release of the figures was delayed after the suspension of the chief executive and chief operating officers due to alleged "unauthorised payments." Indeed, the result of a follow-up probe into the matter is unlikely to be ready yet. More important however is whether the findings might lead to the revocation of the recently awarded 'pioneer' status to its Ebok field in Nigeria. The preferential tax treatment afforded by the same could be worth an extra £332m in cash flow over the next five years, analysts estimated. Best to stay well away until the dust is settled, The Sunday Times's Fortson declares.
If you are off at the moment enjoying your holidays you will probably have felt the benefit of a stronger sterling. For companies listed on the Footsie however it means a very strong headwind. Fully 80% of the profits from the benchmark's constituents derive from overseas with 21 out of its 100 constituent firms reporting in dollars and another five in euros. That includes many of the biggest dividend payers such as HSBC, Astrazeneca, BP or Shell. Particularly hard hit have been outfits who price in dollars but have costs in sterling. Yet investors should be wary of focusing too much on exchange rate risk. Fundamental growth prospects, management determination and drive and how a firm conducts business continue to be more important, says The Mail on Sunday's Midas column.
AB
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