Welcome to our summary of the weekend's quality press tips, provided on Mondays by Weekend City Press Review.
PRESS TIPS:
The Times
■ Tempus: Martin Waller says Morgan Crucible, 287p, looks 'one for the longer term' as it recovers from relatively minor trading problems that forced a profit warning last autumn (Last IC rating: Hold, 14 Feb).
■ Avoid Darty, 46p, after Friday's profit warning disguised as a trading statement (Last IC rating: Sell, 15 Feb).
■ Innovation Group, 25p, looks attractive for its North American growth potential (Last IC rating: Hold, 5 Dec).
The Independent
■ No Pain, No Gain: Derek Pain thinks portfolio member Brightside (Last IC rating: Buy, 17 Sept), recruited last year at 18.5p and now 24p, still looks undervalued. But he remains uncertain about the future in his portfolio of aircraft leasing group Avation (Last IC rating: Buy, 17 Mar 2008)).
The Daily Mail
■ Investment Extra: Dan Hyde reports that some experienced market professionals believe the current equity rally looks like a bubble in the making, which could leave retail investors 'nursing some nasty wounds'.
The Sunday Times
■ Inside the City: Danny Fortson says new Premier Foods CEO Gavin Darby has his work cut out to save the food group from administration, given its debts and pension liabilities (Last IC rating: Hold, 7 Aug).
■ Travis Perkins CEO Geoff Copper is likely to sound a note of caution this week with the building supplier's annual results, suggesting that while the recovery is gathering momentum it is not at the rapid pace some housebuilders would have us believe (Last IC rating: Hold, 26 Jul).
The Sunday Telegraph
■ Questor: Garry White says buy Rio Tinto, £37.48, as it is well-placed to benefit from strong cash flows in the future (Last IC rating: Buy, 15 Feb).
■ Hold Tesco, 365.5p, which looks fully valued after the recent 18 per cent surge in the share price (Last IC rating: Hold, 10 Jan).
The Mail on Sunday
■ Midas: Joanne Hart says buy Greencoat UK Wind when it floats next month at 100p a share as the proposed dividend 'looks attractive' and the company has 'strong growth prospects' (IC comment: 8 Feb).
■ Update: Hold Vp, tipped last September at 304p and now 330p, as the shares 'should show further growth' (Last IC rating: Buy, 28 Nov).
Business press headlines courtesy of Weekend City Press Review:
G20 finance chiefs take heat off Japan
The Japanese yen fell sharply as officials from the G20 meeting in Moscow played down fears of a global currency war and indicated they would not interfere in Japan's plans to boost its sluggish economy though a looser monetary policy. The dollar and euro rose 1 per cent against the yen on Friday, although Sterling hit its weakest level against the dollar for seven months. [Financial Times pp.1, 7, 18]
'Death bond' insurer set for £1bn London float
Partnership Assurance, a UK insurer which specialises in so-called 'death bonds' which pay out enhanced annuities to those whose life expectancy has been reduced by illness, is planning a £1bn London float. The insurer is owned by Cinven which has appointed Morgan Stanley and Bank of America Merrill Lynch to handle the listing, likely to be brought forward because of the current market buoyancy. [Sunday Times p.3.1]
Spanish stir anger over power bills
Spanish energy group Iberdrola has taken a £890m dividend out of UK subsidiary Scottish Power, a move like to 'inflame debate' over above-inflation hikes in household energy bills. Scottish Power, which raised tariffs by 7 per cent last October, accounts for some £1.2bn of Iberdrola's earnings – more than a quarter of group profits. [Sunday Times pp.3.1, 1.18]
Treasury closes in on profits sent abroad
George Osborne made clear at the G20 finance ministers meeting in Moscow over the weekend that he was considering plans to close the loophole that allows multinational companies to shift profits from one country to another to lower their tax burden. But accountants say the proposal, known as 'unitary' taxation, could create as many problems as it solved. [Sunday Times p.3.2]
Tesco calls on Cameron to aid Indian growth
Tesco is considering a major investment in India to open stores under its own name and has called on David Cameron, who is leading a trade mission to the country this week, to raise the issue of foreign direct investment by UK retailers. If successful, then the Tesco board could approve an expansion plan as early as this summer. [Sunday Telegraph p.B1]
Treasury crackdown on swaps
The Treasury has told the Financial Services Authority that companies mis-sold interest-rate hedging products by the banks should be allowed to suspend premium payments. But Financial Secretary to the Treasury Greg Clarke has stopped short of calling for a moratorium on all payments. [Sunday Telegraph p.B1]
Retail chiefs back £25m small company fund
A £25m fund to back small UK growth companies is being supported by Next CEO Lord Wolfson as well as Carphone Warehouse CEO Charles Dunstone. The Pembroke venture capital trust fund, which is being managed by Oakley Group and is expected to list in April, intends to give investors access to a 'private equity-style investment strategy for small companies'. [Sunday Telegraph p.B1]
Plan to break Big Four's audit grip
The Competition Commission is this week expected to publish its interim report into the accountancy profession, proposing 'sweeping reforms' of the dominance by the 'Big Four' firms in the audit market. The Commission is thought likely to suggest a form of 'mandatory rotation' of auditors after a set number of years, although the major firms have already claimed this would do little to foster increased competition. [Independent on Sunday p.85]
Cable savages Bank for failing to boost economy
Business Secretary Vince Cable has suggested that Bank of England Governor Sir Mervyn King has not done enough to help the economic recovery. Cable, in an interview with the Mail on Sunday, says he did not agree with King's comments last week that there was little more the Bank could do to stimulate growth, suggesting instead that incoming Governor Mark Carney might have fresh ideas. [Mail on Sunday pp.71, 76]
