LONDON (ShareCast) - Yesterday's trading statement suggested Sainsbury chief executive Justin King's successful tilt at improving the business may have run its course. However, while Mr King has performed well in regaining customers, boosting profitability and making the stores a more attractive place to shop, the chain still looks to be lagging behind its larger peers.

The Telegraph says it prefers Tesco, which at 14 times forward earnings trades at an unwarranted discount to Sainsbury's 16 times and should be better placed to weather the possible recession to come. What's more, the bid premium that used to sustain the stock has largely disappeared as the market frets about likely falls in property values and the path of future earnings. Sell.

Hypothesising about when the credit crunch might eventually strike Misys is of limited use when, for the moment, it is prospering. All the same, it is hard to see what, at 158½p, or 13 times current-year earnings, will drive the shares higher ahead of completion of the Allscripts deal and improved sentiment on its sector. Avoid, says the Times.

Woolworths’ sale of four London stores to Waitrose for £25.5 million is encouraging because it would appear to open the door to other disposals. That would help to ease the group’s £124 million debt burden (which is bigger than its stock market value) and, alongside the hiring of a new chief executive, could stimulate much-needed interest in the shares, which have lost two thirds of their value in the space of a year.

Yet even at 9¼p, down 6 per cent (or less than eight times revised current-year forecasts and yielding nearly 7 per cent), the unabated structural and cyclical pressures that have brought Woolies to this pass means that the shares are no bargain. Once again, avoid, says the Times.

Investors are clearly looking for safer stocks in this period of economic misery, and they do not come much safer than Mouchel. Cazenove argues that "the group's defensiveness gives a lot of confidence to investors that it will continue to deliver growth and will perform in line with its forecasts." That is undoubtedly true, and investors looking for a safe investment need look no further than Mouchel. For those looking for a bit more than in effect sticking their cash under the mattress, there are more exciting options out there. Hold, says the Independent.

Unlike care homes for the elderly, where the average length of stay is a year, the residency of CareTech’s customers is typically measured in decades, such that 85 per cent of next year’s sales are already secured. Steadily rising fees, a shortfall in provision and tighter regulations – which are prompting smaller operators to sell up – should continue to underpin growth. At 426¼p, 17 times next year’s earnings, CareTech has farther to go. Buy, writes the Times.

Chief executive Auld says that Trifast's shares have toiled as investors have abandoned small-cap stocks in recent months. He says the future is bright as the company is strongly cash-generative and has low gearing. Investors should be more cautious: it would be unwise to punt on a group that would benefit from being bought out, but without a buyer, there is little to indicate a northerly push in the share price. Hold, says the Independent.


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