LONDON (ShareCast) - Worries about the near-term outlook pushed Mecom’s shares down 16 per cent to 18½p. That leaves the group trading at five times earnings, cheap for newspapers by historic standards but still at a premium to Trinity Mirror and Johnston.

There is still merit in the model that European papers can be run more efficiently, but the British groups should recover faster in an upturn. Avoid, says the Times.

At the halfway stage Xaar earned slightly higher profits of £3.7m on sales 4 per cent lower at £22.4m. But lower sales in China will hit the second half, prompting the company broker Landsbanki to reduce its full-year forecast by £1m to £6.4m. The latest setback has revived talk that the US group Danaher, which was in bid talks last year, may return. For now there is little reason to chase the shares, according to the Independent.

The Telegraph says that Xaar faces the difficult task of rebuilding market share in China. Panmure Gordon predicts a fall in revenues in the second half of this year, meaning Xaar’s rating- at 17 times estimated earnings for the full year- is not justified given the current uncertainty. Avoid.

At 177½p, H&T, which carries £34 million of debt, sits at eight times 2009 earnings, which, given the company’s own circumspection, feels about right. Pass, says the Times.

The Independent says that with full-year profits forecast to reach £9m delivering earnings per share of 18.6p the shares look good value.

Meanwhile, the Telegraph says that with a prospective dividend yield of 3pc and on 10 times forecast earnings, you could do worse than pawning an old watch to buy a few shares.

Progress on the outsourcing of local authority crematoriums remains painfully slow and, on most estimates, Dignity’s next special dividend is not due until 2010. In the meantime, rising costs and a slowing death rate could put pressure on earnings. That suggests that yesterday’s 740p, or nearly 18 times next year’s earnings and yielding less than 2 per cent, is a good point to take profits, says the Times.

Wellstream floated in April last year at 320p and peaked at £14.72p in May retreating on the back of the falling oil price. Broker Evolution expects 2008 profits of £75m to advance to £148m by 2010. At 21 times future earnings and buoyed by a rich order book, the shares do not look expensive, says the Independent.

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