| Buy | |||
|---|---|---|---|
| Company | Publication | Reason | Price tipped/ 52-wk high/low |
|
Advanced Computer Software (ASW) Aim |
Investors Chronicle | Healthcare software provider ACS continues to win new business, with recurring revenues now representing 58% of turnover. On an undemanding p/e of 10, it’s a buy. | 43p 45p/31p |
| Anglo Pacific (APF) Mining |
The Mail on Sunday | The miner’s shares have fallen on concerns over commodity prices, so they look cheap even if prices stagnate for a while. A long-term buy for its sound business model. | 276.9p 369.2p/240p |
|
Babcock (BAB) Support services |
The Independent | A strong first half saw the engineer deliver a 46% rise in profits, on the back of demand from South African miners. High commodity prices should support the shares. | 695.5p 733p/513.5p |
|
Bovis (BVS) Household goods and home construction |
The Daily Telegraph | The housebuilder has been buying plots cheaply since 2008; it should see higher margins in the recovery. A p/e of 28 drops to 19 next year. Buy for the growth potential. | 465p 485.5p/326.5p |
|
BP (BP.) Oil and gas producers |
Investors Chronicle | BP trades 13% below analysts’ average price target. It should recover as court proceedings from the Macondo spill are nearing completion. Expect to see a good long-term recovery. | 455p 515p/361p |
|
Cape (CIU) Oil equipment and services |
The Sunday Telegraph | Pressure in the Middle Eastern market triggered a weak trading update – the oil stock may trade sideways for a while. Still, any longer lasting slowdown in the business looks unlikely. | 347.9p 591.5p/328p |
|
Bovis (BVS) Non-life insurance |
The Times | Losses have risen at Catlin following Hurricane Irene, but the insurer expects a repricing of risk and consequently higher profits. It will also raise more capital, maybe $500m. | 392.8p 421.4p/332.1p |
|
Capital & Countries Properties (CAPC) Real estate investment and services |
Investors Chronicle | CapCo is a play on the London property microclimate, with considerable upside potential from the redevelopment of Earls Court into housing. Trades 15% below NAV. | 174p 204p/141p |
|
Cookson (CKSN) General industrials |
The Times | The materials manufacturer suffered following its exit from the US. However steel production elsewhere was up 10% year on year. Net profits should rise 18% this year. | 438.4p 724.5p/395.8p |
|
Daisy (DAY) Aim |
Shares Magazine | The telecoms supplier could be up for a re-rating at its upcoming interim results. Acquisitions have boosted scale and the group looks set to deliver strong organic growth. | 100.5p 127p/88.38p |
|
Dignity (DTY) General retailers |
Investors Chronicle | The funerals provider continues to show solid and predictable growth, translating to rising shares in a falling market. It is set to expand capacity through acquisitions. | 828.2p 853p/645p |
|
Egdon Resources (EDR) Aim |
Shares Magazine | Take advantage of a 25% drop in the shares of exploration tiddler Egdon, which should come up trumps with new drilling. Year-on-year production was up 73%. | 14p 24p/11.75p |
|
EnQuest (ENQ) Oil and gas producers |
The Daily Telegraph | The North Sea explorer is making buckets of cash. Despite a recent production problem, full year output is expected to be 23-24,000 barrels of oil equivalent per day. | 104.1p 157.3p/86.5p |
|
G4S (GFS) Support services |
Shares Magazine | After an abandoned attempt to buy Danish ISS, attention should return to G4S’s fundamentals: strengths in the security sector and growth potential in emerging markets. | 249.8p 290.9p/219.9p |
|
GB Group (GBG) Software and computer services |
Shares Magazine | GB Group is one for risk-tolerant investors: the identity management specialist is rapidly building a global business. The potential in China could put it on the map. | 43.75p 46.75p/33.25p |
|
J Sainsbury (SBRY) Food and drug retailers |
The Daily Telegraph | The supermarket has released impressive numbers, and the downtrodden stock has a 5.2% yield which beats competitors. Plans to improve like-for-like sales are encouraging. | 297.6p 391.2p/263.5p |
|
Lookers (LOOK) General retailers |
Shares Magazine | Specialist parts retailer Lookers is proving resilient, gaining market share and may see share gains on back of resumed bid action. A p/e of 8.4 is moderate; the yield is 4.2%. | 53.5p 72.75p/47p |
|
N Brown (BWNG) General retailers |
Shares Magazine | Home shopping group N Brown looks good value ahead of its January announcement. It should highlight online and international growth trends. A p/e of 10 is undemanding. | 265p 310.7p/251.1p |
|
Restaurant Group (RTN) Travel and leisure |
Investors Chronicle | Like-for-like sales were ahead by 2.7% in the third quarter as the leisure group battles headwinds. But strong brands and good locations means the shares remain a buy. | 282p 335p/254.9p |
|
Scapa (SCPA) Aim |
Investors Chronicle | The chemicals group is back in profit with recovery is being driven by an ambitious new boss. Cash is a third of its market cap and it trades on a cash/enterprise value ratio of just 3.8. | 48p 62p/25p |
| Sell | |||
| Company | Publication | Reason | Price tipped |
|
Lavendon (LVD) Support services |
Investors Chronicle | Shares in the powered-access specialist could drop off should prospects of another bid falter. A 2011 earnings multiple of 10 looks high compared to peers. | 94p 120p/71p |
|
Majestic Wine (MJW) Aim |
Investors Chronicle | Growth is slowing for the wine merchant, which looks to be extracting earnings increases from rising sales prices rather than higher volumes. Hardly cheap on a p/e of 15. | 398p 510p/360p |
|
Rentokil Initial (RTO) Support services |
Shares Magazine | Continuing problems with City Link place questions over the future of the dividend. The turnaround has taken four years and the market needs proof of better times ahead. | 67p 104.5p/64.8p |
|
Tullow Oil (TLW) Oil and gas producers |
The Times | Tullow has struggled of late with tax disputes in Uganda and poor returns from drilling in Ghana and Liberia. Wait to buy until good news is confirmed from new wells in 2012. | 1,360p 1,493p/945.5p |