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News & Tips: Ocado, Burberry, Halfords, Mears, Plexus Holdings, HMV, Imagination Technologies & more

Today's market overview

Equities are steady after yesterday’s minor pullback but The Trader Dominic Picarda reiterates his belief today that we have not yet seen the top of this rally.

IC TIP UPDATES:

Ocado (OCDO) has issued a trading statement detailing gross sales growth of 14.2 per cent in the six weeks to 6 January 2013. Over the fourth quarter gross sales grew by 12.4 per cent, average orders per week by 11.4 per cent and order size by just 1 per cent. There is no detail on margins or profitability. We retain our sell rating.

Another sell recommendation, Burberry (BRBY) has issued a trading update for its third quarter showing better retail performance with like for like sales up by 6 per cent but wholesale sales were down by 5 per cent on an underlying basis and management guiding expectations for wholesale sales to be down in mid-single digits for the year. We keep our sell.

Auto and bikes specialist Halfords (HFD) grew group revenues by 1.6 per cent in the fifteen weeks to 11 January with the autocentres performing strongly, up by 12.4 per cent, and the retail operations flat. We keep our buy rating.

Social housing and domiciliary care specialist Mears Group (MER) says trading remains solid and it has grown its order book from £2.6bn to £3.8bn, with 88 per cent of consensus forecast revenues for 2013 in the bag already. Buy.

Wellhead technology specialist Plexus (POS) has continued its strong run of contract wins with a £700,000 deal with Glencore International for its POS/GRIP wellhead equipment. We keep our buy.

Mining giant Rio Tinto (RIO) has reported record iron ore production during 2012 despite a series of weather disruptions. Across its other commodities such as copper, bauxite, coal and alumina, production also grew strongly. We keep our buy rating as diversified mining stocks look set for a continued bounce.

IG Group (IGG) suffered from challenging market conditions and strong comparatives when it published its half year results which show a 14 per cent fall in net trading revenue and a 21 per cent slide in profits to £81m.

Distributor and wholesaler Smiths News (NWS) has announced a 2 per cent rise in total group revenues, boosted by the acquisition of The Consortium. We keep our buy.

Sell recommendation Michael Page International (MPI) has suffered from deteriorating market conditions with group revenues down 7 per cent on a reported currency basis or 3.6 per cent on a constant currency basis. We keep our sell.

KEY STORIES:

The weak economy combined with an inability to compete with online rivals has put paid to HMV (HMV), which entered administration this morning.

Insurance services business Quindell Portfolio (QPP) has reported continued strong trading and has a record pipeline of prospects.

Onshore gas explorer IGas Energy (IGAS) has confirmed plans to raise more than £22m through the placing of shares at 95p a share.

OTHER COMPANY NEWS:

Imagination Technologies (IMG) has signed a licensing partnership with MediaTek for the deployment of Imagination’s technology into the smart TV market.

Shares in medtech business Angle (AGL) are popular again after the company confirmed it had received £178,000 of deferred consideration for the sale of a portfolio company, which had been under dispute.

Platform rental business Lavendon (LVD) is also popular with investors this morning after reporting a 4 per cent rise in total revenues which means profits are likely to come in at the top end of expectations.

READ MORE...

Read today's press headlines and share tips.

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By Graeme Davies,
15 January 2013

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