Today's market overview
Markets are higher this morning but The Trader Dominic Picarda thinks we are about to see some more sharp sell offs like the one endured yesterday and if the situation continues to deteriorate in Spain it could certainly be tin hat time. Lucky we’ve got a long weekend looming.
IC TIP UPDATES:
Thomas Cook’s (
TCG
) half year results were predictably dreadful, which is why we have kept them on a sell despite the recent self-help initiatives undertaken. Revenues for the six months edged up by 3 per cent, but losses widened by £97m to £263m. Debt is just short of £1.4bn and it is going to be a long haul back to health from here.
Tate & Lyle’s (
TATE
) full year figures broadly met expectations with sales up solidly but margins remain under pressure in some parts of the business. Nonetheless, a resilient performance in such trying economic times justifies our continued buy rating.
We kept Prudential (
PRU
) on a buy after its recent results showed the benefits of its expansion into Asia, and it is now strengthening its North American position with the acquisition of Reassure American Life Insurance Company from Swiss Re for £398m. It should add £100m in earnings in its first year.
People still seem to be drinking beer, even in a recession and Fuller Smith & Turner’s (
FSTA
) results show growth across all its divisions, although underlying profit growth was only modest at 3 per cent. Its shares are still a buy.
Bellzone Mining’s (
BZM
) shares have ticked up on news that it has shipped it first ore from the Forecariah project in Guinea. Analysts reckon this project alone could be worth more than Bellzone’s current share price.
Chime Communications (
CHW
) shares are popular today after the company announced the sale of its Bell Pottinger public relations business to management for just short of £20m. This allows Chime to concentrate on communications and sports marketing. We continue to rate its shares a buy.
KEY STORIES:
IT services business Logica (
LOG
) is the stand out stock today after attracting what could be a knock out £1.7bn offer from Canada’s CGI. The bid is at a 60 per cent premium to Logica’s recent share price and will be a relief to investors who have stuck with the company through two profit warnings. Luckily we retired our sell advice on Logica earlier this week.
Oil explorer Rockhopper (
RKH
) is the only Falklands firm to thus far make a significant oil find, although Borders & Southern has found gas condensate. But the scale of investment required to exploit the potential of Rockhopper’s Sea lion discovery is daunting, hence confirmation in today’s results that it continues to seek a farm-in partner with financial muscle.
High street retail remains a tough place to be, as illustrated by results from DIY specialist Kingfisher (
KGF
). The wet weather in April, coupled with tough comparatives from the previous year saw like for like sales slump 4.8 per cent across the group in the first quarter.
Bikes and cars specialist Halfords (
HFD
) has fared even worse, with profit before tax sliding more than 20 per cent over the full year.
OTHER COMPANY NEWS:
Regal Petroleum (
RPT
) has sold off its final interests in Romania, leaving the company to concentrate on its Ukrainian assets.
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