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News & Tips: HSBC, Tesco, Stagecoach, Polo Resources, Smiths News, Menzies, Silverdell, FastJet & more

Today's market overview

Equities are ticking up again and The Trader Dominic Picarda maintains his belief that we are only in the early stages of a rally despite wider concerns over the fiscal cliff and eurozone economic woe.

IC TIP UPDATES:

Sell recommendation HSBC Holdings (HSBA) has confirmed the sale of its stake in the Ping An Insurance company to a group of Thai companies for a total of $9.4bn.

Buy recommendations Smiths News (NWS) and John Menzies (MNZS) have been boosted by news of renewed five year contracts with magazines distribution business Marketforce. We keep Smiths and Menzies as buys.

Rail and bus operator Stagecoach (SGC) has announced strong trading for the six months to 31 October with revenues up by 5.9 per cent on a like for like basis and reported pre-tax profits up from £90m to £116m. Buy.

Positive drilling results have boosted Simon Thompson recommendation Polo Resources (POL). Its 90 per cent-owned Sierra Leone gold play Nimini Holdings has released good results from drilling at extensions to its Komahun prospect.

Fellow Simon Thompson recommendation First Property (FPO) has trading resiliently considering its focus is on property in the UK and Poland. Its interim results showed a decrease in both profits and assets under management although a large proportion of this was due to currency movements. Shareholders continue to back the business with new funds being raised for investment in both the UK and Poland.

A third Simon Thompson recommendation, Trading Emissions (TRE), has made another step in the long process of liquidating its assets with the sale of its holding in Chapel Street Environmental for $4m.

Environmental services business Silverdell (SID) continues its recent strong progress with news of a 38 per cent hike in revenues to £82.5m and a 43 per cent improvement in adjusted pre-tax profits at £4.3m for the year to September. Its order book has more than doubled and £97m of work for 2013 is already contracted. We keep our buy.

FastJet’s (FJET) rapid evolution continues with the recently launched African budget airline yesterday saying it was in talks to buy the bust South African carrier 1time before Christmas and today announcing discussions with Emirates over an African tie-up. We maintain our buy recommendation.

Asset manager Brewin Dolphin (BRW) is performing well in tough market conditions with total managed funds up from £24bn to £25.9bn in the year to September and profits 36.5 per cent higher. Buy.

Unite Goup (UTG) has sold off £116m worth of assets, meeting its plan for disposals in 2012. We keep our buy.

Interior Services Group (ISG) has been appointed as lead contractor on a €150 data centre. Buy.

KEY STORIES:

Tesco (TSCO) is dominating the headlines after chief executive Philip Clarke announced a strategic review of the Fresh & Easy chain in the US, effectively ending the dream of US expansion for the retail giant. The shares have reacted positively despite the fact that trading figures released alongside the Fresh & Easy announcement detail difficult times in the UK, Europe and Asia. Overall group sales were up by just 1 per cent at actual exchange rates with UK like for like sales down 0.6 per cent.

Sage Group (SGE) has announced rather lacklustre full year results with reported revenues flat and profits up by just 1 per cent as 6 per cent subscription revenue growth was offset by a 5 per cent fall in software and service revenues.

OTHER COMPANY NEWS:

Russian gold miner Petropavlovsk (POG) has sold off some non-core assets for a total consideration of $21.65m.

READ MORE...

Read today's press headlines and share tips.

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By Graeme Davies,
05 December 2012

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