LONDON (ShareCast) - Schroders shares have rallied by a third since last month’s low, largely on relief at the resilience of its retail operations.
But with shareholders more inclined to apply a discount to Schroders’s cash pile, and markets still febrile, ten times 2008 earnings is a good point for short-term investors to take profits says the Times.
Equities account for some two thirds of the company's assets under management so if, in the words of Schroders' management yesterday, "market uncertainties persist", more stormy waters await. With a hefty cash pile of £492m, no debt and capital surplus above regulatory requirements, the company is in a good defensive position, but the shares still appear overpriced considering there is no end in sight to these unpredictable markets. Sell says the Telegraph.
Underwriter Amlin is trading in line with the sector and looks to be reasonable value. On almost six times forecast earnings, the shares are worth holding on to, however, more excitement can be found elsewhere. Hold says the Telegraph.
Data sorting software giant Autonomy unveiled first-quarter profits in line with expectations but the shares tumbled 15%. Trading at just under 30 times forecast earnings, there is a clear case for arguing the shares look expensive. However, with brokers giving Autonomy share price targets of up to £12 and everything looking on track, any dips are a good opportunity to add to holdings. Buy says the Telegraph.
William Hill has had its problems over the past year or so. It took a long time to find a replacement for chief executive David Harding. Then there are the well-documented problems with the company's online offering. But the latter issue is being dealt with and latest numbers suggest that new boss Ralph Topping has his hands firmly on the tiller. Based on that, these shares are the value bet of the gaming sector. Buy says the Independent.
Smiths News says that that sales and profit growth are on target for the rest of the year. On a valuation basis, independent analysts at UBS reckon the group is a decent bet. The company does operate in a tricky sector that will remain choppy for the foreseeable future. That said, the group is doing a pretty good job of keeping its head above water. Hold says the Independent.
The recent worsening of trading in both divisions is troubling for pub group Punch and has raised questions over the resilience of the tenanted pub model. The company insists it is no worse than the market and expects some improvement after the anniversary of the smoking ban had passed, making comparatives easier. The shares trade on a full-year earnings multiple of about seven. Hold says the Times.
Filtrona’s bind is that the bulk of its businesses not exposed to tobacco are niche and not well understood. However, at eight times 2008 earnings, Filtrona looks unjustly cheap for a strongly cash generative company where profits are still moving smartly ahead. Hold says the Times.
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