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 that John Laing Infrastructure Fund (JLIF), 113p, has had a busy year of acquisitions, but next year is unlikely to be as busy; hold for income (Last IC rating: High enough, 6 Apr 2011).
■ Recruitment business SThree (STHR), 340p, is set to rebound in profits in 2014, suggesting it is too early to buy just yet (Last IC rating: Hold, 15 Jul).
■ EMIS Group (EMIS), 704p, is a good punt on NHS reform, but is a long-term prospect (Last IC rating: Hold, 6 Sept).
■ Tiddler to watch: Director buying was seen at PuriCore (PURI), 40.75p, a technology company aiming to stop the spread of pathogens through the water supply (Last IC rating: Fairly priced, 28 Apr 2009).
The Independent
■ No Pain, No Gain: Derek Pain argues the case for the retention of paper share certificates, and is happy to note the tardy surpassing of his buying price by Avation (AVAP) shares, now at 90p, as directors buy and prospects are brightening (Last IC rating: Buy, 17 Mar 2008).
■ Market Report: Buy Imagination Technologies (IMG) (Last IC rating: Buy, 19 Jun), 293.5p; Sell BTG (BTG) (Last IC rating: Hold, 20 May), 376.8p; Hold Vodafone (VOD) (Last IC rating: Hold, 4 Sept), 210.75p.
The Daily Mail
■ Investment Extra: Sam Dunn explains how the cash and shares from Vodafone (VOD) and Verizon Communications will be distributed to retail investors, equity income fund investors, and holders of Sipps and Isas (Last IC rating: Hold, 4 Sept).
The Sunday Times
■ Inside The City: Danny Fortson says Barratt Developments (BDEV), 314.5p, is back with its first dividend since 2008, and pre-tax profits up 70 per cent from last year: broker Jeffries has placed a target price of 435p (Last IC rating: Hold, 16 Jul).
■ Ryanair (RYA) suffered from what was seen as a profit warning from Michael O'Leary, predicting earnings at the low end of expectations, and the shares duly fell by 14 per cent; analysts think O'Leary is under-promising to over-deliver: now could be a good time to buy (Last IC rating: Hold, 20 May).
The Sunday Telegraph
■ Questor: John Ficencec says buy Vedanta Resources (VED), £11.90; the restructuring kicked in at the end of August, saving about £128m, China is bouncing back and the fallen rupee could be a boost, despite problems in India and debt due for repayment in the next two years (Last IC rating: Hold, 16 May).
The Mail on Sunday
■ Midas: Joanne Hart looks at directors' dealings: on the buying side, she inspects Highland Gold Mining (HGM) (Last IC rating: Sell, 23 Apr), 77.25p, Melrose Industries (MRO) (Last IC rating: Hold, 29 Aug), 302.5p, and Premier Oil (PMO) (Last IC rating: Hold, 22 Aug), 367.5p; all have room for investors to make money.
■ Sellers include Moneysupermarket.com (MONY) (Last IC rating: Hold, 31 Jul), 174.75p, avoid; Ted Baker (TED) (Last IC rating: Hold, 21 Mar), £9.48, expensive, but a buy on any short-term weakness; SuperGroup (SGP) (Last IC rating: Buy, 15 Aug), £11.97, sell; and Utilitywise (UTW) (Last IC rating: Buy, 16 Apr), 141p, sell some but retain 60 per cent.
Business press headlines courtesy of Weekend City Press Review:
Fed puzzle after mixed jobs data
US jobs data for August were weaker than expected: the US added only 169,000 jobs, while the percentage of the population in the labour force fell to 63.2 per cent, the lowest since August 1978. Fewer Americans were seeking work drove the jobless rate down to 7.3 per cent: unemployment figures are closer to the Fed's goal, but only because fewer are seeking jobs. The Fed will need to decide when and whether at all it begins its 'tapering' of asset purchases. [Financial Times, pp.1, 5]
Zoopla fuels City's £40bn float frenzy
Six-year old property website Zoopla is considering a float that could see it valued at over £1bn, in the vanguard of a wave of flotations that could be worth as much £40bn: estate agent Foxtons is set for a debut shortly, and Merlin Entertainments are due to confirm a £4bn float in the next few weeks. Sunday Times sources suggest that a dozen more will follow next year, including House of Fraser, Card Factory and Appliances Online, to be possibly followed by Urenco, EE, Saga and TSB. Daily Mail & General Trust owns 50.1 per cent of Zoopla. [Sunday Times, p.3.1]
Royal Mail sale delivers £2,000 to every postie
Final approval of the Royal Mail's £3bn market listing could come this week, as could the £5bn Lloyds Banking Group government shares sale. Chief executive Moya Greene is to set aside 10 per cent of the business to distribute among 150,000 staff, equal to £2,000 each at a valuation of £3bn. Analysts expect a regular 50 per cent annual profits dividend payment to investors, after a special payout at the end of the financial year in March. In an attempt to curtail planned strikes by the CWU, Royal Mail has offered a pay deal higher than the current 8.6 per cent over three years, but reliant on a cap on pensionable pay at 5 per cent. [Sunday Times, p.3.1]
Serco risks bar from MoD contract
Currently under investigation for overcharging the Ministry of Justice and falsifying transfer documentation, outsourcer Serco (SRP) is in danger of being excluded from a defence outsourcing deal. Serco is part of a consortium led by CH2M Hill which is bidding against Bechtel, PricewaterhouseCoopers and PA Consulting for the running of Defence, Equipment & Support, the MoD's jets, tanks and warships procurer, with a £15bn budget. [Sunday Times, p.3.3]
Bank slams bubble 'hype'
In an interview with the Sunday Times, Bank of England MPC member Paul Fisher dismissed fears of a housing bubble caused by the Help to Buy scheme. He said that there was an increase in housing supply as the market picks up, and the scheme will translate into a supply-side response and not into price increases; talk of London hotspots was 'hype'. He said that forward guidance was intended to boost business and household confidence. [Sunday Times, p.3.1]
Davey woos China over nuclear plants
Energy secretary Ed Davey is traveling to Beijing this month seeking Chinese backing for the troubled £200m low-carbon overhaul of the energy industry. EDF is in negotiations with the UK government over guaranteed 35-year prices for power from, and with China General Power Group for investment in, two nuclear reactors it plans at Hinckley Point. CGPG will take a 50 per cent stake, but only if it is granted operational control. The government wants up to 12 new reactors, but the leading utilities need external funding. [Sunday Times, p.3.2]
Gas 'fudge' could cost UK £1bn
Analysis commissioned by the government from Redpoint indicates that the decision by the government not to invest £750m over ten years in subsidizing new gas storage facilities could cost consumers up to £1bn in import costs should gas demand be high, as it was in the last harsh winter - the UK has 15 days' worth of storage. Plans including Centrica's (CNA) £1.4bn Baird store in a North Sea gas field and Stag Energy's Gateway store under the Irish Sea are expected to be shelved. [Sunday Telegraph, p.B1]
Disney rival Merlin aims to conjure IPO for small investors
Merlin Entertainments, owner of Legoland, Madame Tussauds, Sea Life Centres, the London Dungeon and the London Eye, and the world's second biggest attractions owner behind Disney, is to offer a £3bn market listing before Christmas, and intends to offer more than 10 per cent of its shares to small investors, taking advantage of its brands' profiles. Merlin originally shelved a flotation in 2010, and sold a 28 per cent stake to CVC Capital Partners to buy out Dubai International Capital and Blackstone, and have expanded into Asia: 14 per cent of revenues now come from Asia-Pacific. [Sunday Telegraph, p.B1]
Returning TSB vows to be local bank benefiting local businesses
The TSB brand is set to return to the high street on Monday, after an 18-year absence, formed from the 631 Lloyds Banking Group branches obliged to be sold by EU competition ruling. Chief executive Paul Pester insists the bank will bring back traditional banking, and vows not to use customers' money for investment banking. Lloyds CEO Antonio Horta-Osorio says the brand has "all the conditions to be a very strong challenger on the high street". [Sunday Telegraph, p.B1 ]
CBI calls time on 'wear and tear' UK
John Cridland, director-general of the CBI, warned that the UK has underinvested in infrastructure for a prolonged period and is seeing 'wear and tear', and falling behind- the UK is now 28th worldwide in terms of infrastructure quality - behind Saudi Arabia and Barbados. The CBI proposes the establishment of a new National Infrastructure Commission to identify needs up to 30 years ahead, moving away from short-term political expediency. The government says it will be investing £300bn over the course of the next parliament in long-term infrastructure developments. [Sunday Telegraph, p.B3]
