| Buy | |||
|---|---|---|---|
| Company | Publication | Reason | Price tipped |
|
Acal (ACL)
Electronics |
The Times | The electronics distributor’s shares have halved since last spring on eurozone fears, but orders are rising. The shares trade on a price/earnings (p/e) ratio of eight – lock some away. | 305p/160p* 173p |
|
BHP Billiton (BLT)
Mining |
The Daily Telegraph | Fears of slowing growth in China and eurozone worries have hit the miner, but iron-ore production is up 19%. A 2013 p/e of 8.1 looks too cheap. Buy. | 2,382p/1,625p 1,819p |
|
Big Yellow Group (BYG) REITS |
Investors Chronicle | The storage firm is raising rents and occupancy and has plenty of room for growth in the UK’s young market. The shares are worth a look at a 29% discount to the property portfolio value. | 328p/218p 295p |
|
BP (BP)
Oil and gas |
Shares | Problems at Deepwater Horizon and with the TNK-BP joint venture should be resolved by the end of the year, prompting a re-rating of the shares. The p/e is seven, the yield 4.5%. | 512p/361p 444p |
|
Breedon (BREE) Building materials |
The Times | The aggregates firm is in pole position to pick up assets from a forced sale by heavyweights Lafarge and Tarmac. Despite a 40% rise, the shares remain a buy. | 25p/17p 24p |
|
Burberry (BRBY) Apparel |
The Times | Growth of up to 20% in China’s luxury goods market could help this British handbag maker. The shares are not cheap on a p/e above 20, but the growth potential is huge. Buy. | 1,610p/1,034p 1,229p |
|
Cineworld (CINE)
Entertainment |
The Daily Telegraph | While the cinema chain’s footfall could be hit in the short term by the Olympics, there is a nice mixture of income and growth potential in Europe. Buy into an attractive yield of 5.5%. | 223p/165p 218p |
|
Domino’s (DOM)
Retail |
Investors Chronicle | Poor weather helped boost the pizza chain’s like-for-like sales 5.2%, and it is expanding into Germany, with eight more stores planned for 2012. A p/e of 24 is justified. | 527p/383p |
|
Fairpoint (FRP) Financial services |
Shares | The debt management firm’s diversification away from individual voluntary arrangements looks sensible, and the shares are cheap on a forecast p/e of five. The yield is nearly 8%. | 73p/44p 65p |
|
Go-Ahead (GOG) Transportation |
The Daily Telegraph | The bus operator has 21% of the London bus market so should benefit from the 500,000 tourists expected in the capital for the Olympic Games. A yield of 6.4% is worth buying into. | 1,590p/1,074p 1,269p |
|
Highland Gold (HGM) Mining |
Investors Chronicle | After losing half their value since January, the shares of this gold miner look to be recovering. They are a short-term buy, trading at a 20% discount to book value and on a p/e of five. | 217p/94p 111p |
|
Int’l Mining and Infr (IMIC) Aim |
Shares | This £18.9m investment firm’s iron-ore projects in Africa look promising: it has close ties with local governments and China could get involved. It’s a risky play. | 33p/12p 32p |
|
Interserve (IRV) Commercial services |
Shares | The support services firm should benefit from increased infrastructure work in the Middle East. The 5.9% yield is covered 2.2 times by forecast earnings. | 355p/269p 334p |
|
Old Mutual (OML) Financial services |
Shares | The life insurer may be set to launch an initial public offering (IPO) for its US asset management business. It’s cheap on a big discount to end-2011 value per share. | 167p/98p 156p |
|
Pendragon (PDG) Retail |
Shares | The car dealer’s shares could see a re-rating at the August interims on the back of positive news over car registrations (up 15.7%) and website footfall (up 33%). A p/e of 8.7 looks too low. | 16p/6.75p 15p |
|
President Petroleum (PPC)
Aim |
Shares | The Argentine-focused oil explorer is set to increase its acreage in the area fivefold, and looks cheap at a 33% discount to assets on fears over nationalisation. It’s a speculative buy. | 61p/25p 26p |
|
Quindell Portfolio (QPP) Aim |
Investors Chronicle | Challenging conditions in motor insurance should boost this software firm, which helps insurers cut costs. A target of earnings per share (EPS) of 2p in 2013 implies a p/e of 3.5. Buy. | 8.5p/2p 7p |
|
Rentokil (RTO) Commercial services |
This is Money | New management could help turn around this group’s parcel delivery service City Link, which has long weighed on the shares. If a success, the shares would be cheap on a p/e of under ten. | 96p/58p 76p |
|
Royal Dutch Shell (RDSB)
Oil and gas |
The Daily Telegraph | The energy giant’s decision to walk away from a potential bidding war to buy east Africa explorer Cove Energy looks a wise move. Buy for a secure dividend yield of 4.8% rising to 5%. | 2,410p/1,762p 2,291p |
|
Segro (SGRO)
REITS |
Investors Chronicle | The loss of its biggest tenant has hit the industrial landlord’s shares, which have fallen 2.7%. But the 6.3% dividend is still covered. | 315p/194p 237p |
|
Senior (SNR)
Misc. manufacturing |
Investors Chronicle | A fall from April’s high of 213p on weak European car data is overdone, as this engineer has two-thirds of its business in fast-growing aerospace. A forward p/e of just 11 looks too cheap. | 215p/129p 179p |
|
Vodafone (VOD) Telecommunications |
The Daily Telegraph | The mobile phone operator has been hit by customers tightening their belts, with revenue down 7.7% year-on-year. However, the dividend yield of 7.4% (rising to 7.7%) looks safe. Buy. | 187p/150p 180p |
|
WH Ireland (WHI)
Div. financial services |
Investors Chronicle | A £2.3m hike in administration costs to boost capacity hit this broker’s earnings. Yet assets under management rose 14%, the shares look cheap and the benefits will soon come through. | 105p/49p 69p |
| Sell | |||
| Company | Publication | Reason | Price tipped |
|
Aggreko (AGK) Commercial services |
Shares | A sales warning from US engine maker Cummins bodes ill ahead of half-year results on 2 August. A prospective p/e of 18.3 could come under pressure. Sell. | 2,347p/1,519p 1,940p |
|
G4S (GFS) Commercial services |
Shares | The fiasco around failing to provide enough guards for the Olympics has hit this security firm’s share price and the reputational damage could affect new business. Avoid it for now. | 293p/214p 251p |
|
National Grid (NG)
Gas |
The Daily Telegraph | A tough stance from regulator Ofgem over 2013-2021 proposals could endanger the energy distributor’s dividend. The shares could fall further on bad news. | 695p/546p 666p |
| * 52-week high/low | |||