Hold on to shares of Vodafone (VOD) once the sale of its stake in Verizon is completed, the Sunday Telegraph’s Questor column said. Vodafone will pay 104p a share to shareholders from the proceeds of the sale. After that, Vodafone is a potential takeover target for AT&T and other North American buyers. The shares are a solid hold because the mobile phone operator will be flush with cash after the deal with options to make acquisitions and spend on new technology. After the Verizon deal completes, Vodafone will trade at about 25 times earnings – high for a low growth company but things could change quickly.
Get out of shares in Rockhopper Exploration (RKH), the Sunday Times’s Danny Fortson said. Rockhopper shares rose last week after Premier Oil (PMO) repeated its commitment to exploring in the Falkland Islands, where Premier sold a controlling stake in its reservoir two years ago, promising to fund development. But Rockhopper’s boss Simon Lockett is leaving with no successor in place. His replacement will face extreme pressure from shareholders for a change in strategy so Lockett’s pledge may be worthless. In his Inside the City column Fortson said Rockhopper should be very worried and if he was an investor he would sell.
Buy shares of TyraTech (TYRU), whose Vamousse treatment kills head lice and their eggs without pesticides the Mail on Sunday's Midas column said. Walmart, the biggest US retailer, will start stocking Vamousse, which is made from plant and vegetable oils, in April. The global head lice market is worth more than £430m a year and TyraTech should gain market share because lice have become resistant to many existing treatments. The company has also developed repellents for animals and humans – a market worth almost £1.5bn a year. Its bosses are experienced and adventurous investors should reap rewards.
Darty (DRTY) shares are ones to hold on to, Questor advised in the Sunday Telegraph. The company, formerly known as Kesa Electricals, is listed in London but focuses on selling electrical goods in France. It reported like-for-like sales up 3.2 per cent last week but its French gross margin narrowed sharply. The shares trade on 21 times forecast earnings and are not cheap but an expected recovery in profits will reduce that multiple to 17 times.
BUSINESS PRESS HEADLINES:
Barclays (BARC) is under scrutiny by regulators and could face a hefty fine after thousands of confidential customer files were stolen in a data breach described as catastrophic by an adviser to the business secretary, Vince Cable. The files, containing details on 2,000 individuals including their names, addresses, phone numbers, passport numbers, mortgages and levels of savings, were allegedly sold for use in boiler-room scams, in which vulnerable savers are snared into fraudulent investments. - The Guardian
The Bank of England is to test whether banks and building societies would go bust if house prices crash. A ‘stress test’ will examine whether banks will need bailing out if prices plunge. It is being drawn up by the Bank’s Financial Policy Committee, whose members include Governor Mark Carney. - Daily Mail
The Energy Secretary has questioned the profit margins made on gas by Britain’s biggest energy companies, going as far as suggesting that the UK’s biggest supplier, British Gas, could be broken up. In a letter to regulators, Ed Davey estimated that margins on gas bills are up to five times those made on electricity. He pointed to evidence indicating that British Gas was using its grip on the market to boost profits, and said the company could face a market investigation. - The Telegraph
A Labour government would introduce quotas to get more directors from ethnic minorities on to the boards of British companies, it was announced today. The intervention into the debate over the profile of Britain’s business leaders follows a new report which shows that more than half the boards in the FTSE 100 are all-white. - The Times
The Eurozone’s new chief banking regulator has warned that some of the region’s lenders have no future and should be allowed to die, heralding a far tougher approach to the supervision across the currency bloc. Danièle Nouy also signalled she wants to weaken the link between governments and the bloc’s banks that lies at the core of the region’s crisis by breaking with tradition and demanding lenders hold capital against their sovereign assets. - Financial Times
Car maker BMW is likely to have sold more vehicles in January compared to the same month last year thanks to rising demand in China, where group deliveries surged more than 20 per cent. Overall deliveries, including the British Mini and Rolls-Royce brands, increased in single-digit terms in the United States and were also up in core European markets, according to the German group’s finance chief Friedrich Eichiner. - The Scotsman
George Soros’s Quantum Endowment fund had its second-best year ever in dollar terms in 2013, adding $5.5bn to the billionaire’s fortune and putting Quantum back in top place among the most successful hedge funds of all time. - Financial Times
