Another dead cat bounce this morning after the sellers were out in force yesterday. The Trader Dominic Picarda believes the bears are still in charge, especially after the EU meeting yesterday broke up with no co-ordinated plan on how to tackle the seemingly never-ending crisis.
IC TIP UPDATES:
Providence Resources’ (PVR) shares are popular today after confirmation that the Barryroe find, offshore Ireland, contains a ‘high productivity oil system’. Its shares remain a buy ahead of further news on recoverable resources later this year and the good news will pull well partner Lansdowne Oil & Gas (LOGP) along too.
Our sell recommendation Thomas Cook (TCG) has ended its search for a new chief executive after poaching Harriet Green from electronics distributor Premier Farnell (PFL). Ms Green is regarded as a safe pair of hands, which is just what Thomas Cook needs after a torrid six months.
Investors are desperately seeking solid dividend payers to insulate themselves against the volatile markets, hence the recent performance of United Utilities’ (UU.) shares. Results today confirm a solid, if unspectacular, performance with all key metrics pretty much flat on last year and confirmation of that 5 per cent dividend yield, which keeps it as an income buy.
Kids retailer Mothercare (MTC) reported withering losses for the year to March after taking a £100m hit for restructuring its struggling estate. Investors love to get in early on a turnaround story and new chief executive Simon Calver, who joined from Lovefilm last month, is obviously talking a good game at this point because Mothercare shares have surged 16 per cent. But we remain unconvinced.
Buy recommendation Dairy Crest (DCG) is still in the midst of its transformation into a branded good business and relatively flat results reflect that but sales of five key brands rose by 11 per cent, which suggests management’s refocusing of the business is wise.
Specialist credit provider S&U (SUS) appears to be holding its own in tough market conditions with customer numbers in its home credit division up 4 per cent and its motor finance business receivables 11 per cent higher. The continued reluctance of banks to lend will continue to push borrowers towards the likes of S&U and that’s why we remain buyers.
KEY STORIES:
Pursuit Dynamics (PDX) is having a roller coaster week. Results today helped its shares rebound 15 per cent, but it remains a pale shadow of its former self and this week’s gyrations could merely prove to be its death throes. The company told investors today it has £7m cash in the bank and is burning £750,000 a month. The results of a strategic review are expected before the end of next month.
UK coal miner ATH Resources (ATH) has been hammered by the falling price of coal worldwide in recent months and this has prompted management to halt expansion at one of its mines. Upcoming results will also be hit by the falling coal price.
OTHER NEWS:
In the US, Hewlett-Packard has swung the axe following last year’s $10bn acquisition of UK software business Autonomy with founder Mike Lynch the highest profile casualty. He’s not alone though, HP is laying off 27,000 people in total by 2014.
Unsurprisingly the volatile market conditions have begun to affect the IPO market and one of the more esoteric of recent times, JSC Georgian Railway, has pulled its planned float, which had been expected to value the business at up to $1bn.
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