Wed, 30 Apr, 2014
Telecity has dealt investors quite a bit of volatility of late, as the stock fell victim to the sometimes wild gyrations in market sentiment. At the start of the year it dropped massively after it said it would be investing in sales and marketing. Yesterday the shares jumped 15 per cent after reporting improved organic growth. The company is an attractive bet on the continued expansion of so-called 'cloud services' and 'rich content' via mobile phones and tablets.
Tue, 29 Apr, 2014
As is often the case, what upon first inspection appears to be attractive turns out not to be quite so when looked at in greater detail. That has turned out to be the case with the proposed merger between Premier Oil and Ophir Energy. The quandary facing the former is that it needs large amounts of cash to proceed with the development of the Sea Lion oilfield off the Falkands. Unfortunately, Ophir also needs considerable resources to see its investments off the east African coast reach completion. Then there is the matter of Premier Oil's Chief Executive, Simon Lockett, for whom the firm is now looking for a successor.
Sun, 27 Apr, 2014
Severn Trent investors have reasons to be annoyed after the water company's performance since rejecting a takeover bid, Danny Fortson argued in the Sunday Times. In his Inside the City column, Fortson said Severn's shares are almost a fifth lower than the 22 pounds offered by overseas investors a year ago. New Chief Executive Liv Garfield has a difficult job because the industry regulator has said price rises will be limited. With Deutsche Bank predicting falling profits and a small dividend cut next year, some investors may not be in the mood to celebrate.
Fri, 25 Apr, 2014
Yesterday's trading update from Premier Foods showed the daunting task which management at the firm faces. Yes, it recently carried out a capital restructuring, involving a 353m pound rights issue, selling 500m pounds in high-yield bonds and securing a new 272m pound borrowing facility. In parallel, it renegotiated its pension fund liability payments. However, total sales dropped by 6.2 per cent and by 3.5 per cent at its 'power brands' over the last quarter.
Thu, 24 Apr, 2014
Associated British Foods (ABF), one of the few remaining conglomerates on the FTSE 100, yesterday released a strong first half trading update, including a six per cent increase in pre-tax profits. That result was slightly ahead of market expectations. Together with the announcement that the company's Primark unit is to enter the US retail space it sent the stock sharply higher. However, it should be pointed out that introducing a UK retail format in the US has proven the graveyard of many a British company, with the most recent victim having been Tesco.
Wed, 23 Apr, 2014
When a company says that it is willing to pay an over 30 per cent premium for one of its rivals, investors should sit up and take notice. Well, that's exactly what Pfizer did yesterday by offering to purchase AstraZeneca. Simply said, the British company's stock is cheap although the firm readily admits that it does not expect to see a recovery in revenue until 2017. Nonetheless, the drugs giant is in transition and generates loads of cash. Despite the 25 per cent drop in its pre-tax profits last year, to 7.94bn dollars, its operating cash-flow, after interest and tax, increased from 6.95bn dollars to 7.4bn dollars, offering ample dividend cover. Hence, investors are getting paid a 4.5 per cent yield as they wait for the drug pipeline to bear fruit.
Sun, 20 Apr, 2014
Research from Redburn Partners shows that markets have new-found faith in Primark, the retail arm of Associated British Foods. Yet investors may have cause to be wary. The company's stock price has risen by 50 per cent over the last twelve months, in reaction to plans to expand its budget fashion chain Primark across the Continent.
Thu, 17 Apr, 2014
Consumer goods giant Reckitt Benckiser's first quarter results may have satisfied market expectations and its consumer health business - its main engine for growth - is doing well enough, with revenues growing by 11 per cent during the most recent reporting period. As well, the firm is aiming to float its pharmaceutical side. No less important, and under-appreciated by investors, one must also factor in its putative offer for Merck&Co.'s over-the-counter (OTC) health products unit, which would transform its own growing healthcare division.
Wed, 16 Apr, 2014
Shares in SABMiller dipped on Tuesday following its fourth-quarter trading update. Investors opted to take a little bit of money off the table after recent strength in the share price. Of particular importance for the group are the headwinds which it faces in foreign exchange markets, especially the strength of the dollar against various emerging market currencies. Not only does it lower the value of its profits overseas when translated, it also entails higher inflation and lower purchasing power in those emerging markets in which it is present.
Tue, 15 Apr, 2014
As Chinese companies increasingly look to rigorously protect their intellectual property claims in the western world companies such as RWS Holdings will benefit. The firm obtains 70 per cent of its sales from translation services for corporates that allow them to protect their copyrights across a range of territories. The latest data from the World Intellectual Property Office showed that patent filings jumped five per cent last year to 205,000, while those in China did so by almost 16 per cent.
Sun, 13 Apr, 2014
Stick with shares of Marks & Spencer and consider what the company could achieve if all its businesses performed well, Questor said in the Sunday Telegraph. M&S's food business has continued to do well while supermarket rivals face price pressure. M&S reported clothing separately from its other non-food products at last week's trading update, showing clothes sales up 0.6%. That is not great but Chief Executive Marc Bolland said womenswear was encouraging. The question for M&S is whether increased sales are at the expense of lower prices. Until that matter is resolved the shares are a hold.
Fri, 11 Apr, 2014
Some analysts are wondering whether the agreement reached by RBS with the government so as to be able to resume dividends will actually bring forward the date of shareholder payments. The Times' Tempus is not so sure. In essence, the bank needs to rebuild its capital reserves - so as to receive regulatory approval to resume pay-outs - while at the same time generating sufficient funds to pay the government for its dividend access share. For that to happen, it must return to profitability and pull off the flotation of its US subsidiary, Citizens.
Thu, 10 Apr, 2014
WS Atkins, the 14th largest global design company in the world, may be seeing the first sign of an upturn, judging by the fact that it has increased its annual intake of graduate trainees in Britain for the latest financial year, to 330 from 250. The underlying assumption, naturally, is that projects such as HS2 and Crossrail will generate more than enough work to keep them busy. Just as important, it has disposed of underperforming assets in both the UK and the US, which should feed through into improved margins this year.
Wed, 09 Apr, 2014
Polymer specialist Victrex saw a significant uplift in second quarter sales, for growth of 14 per cent to 1,584 tonnes for the whole of the first half. However, the firm added that it is now selling higher volumes of lower profit-margin products. As well, foreign exchange headwinds in key markets such as the US and Europe are now expected to be stronger during the current financial year, which ends in September. The outfit also benefited from a steady recovery in the demand for its plastic products used in the medical market. More significantly, it is embarking in the largest expansion ever of its capacity to manufacture its temperature and chemical resistant lightweight polymer Peek, which is used in both the automotive and aerospace markets.
Tue, 08 Apr, 2014
The massive merger announcement from Holcim and Lafarge may have an unexpected beneficiary - in the form of Breedon Aggregates. The competition authorities in the UK are expected to approve the merger between those two European rivals, while at the same forcing them to let go of some assets. One possible unit that might come free is a cement works in Staffordshire. Breedon is a consolidator, snapping up assets on the cheap. The purchase of that unit would give the company its first entry into cement, allowing it to produce the full range of building materials, The Times Tempus writes.
Sun, 06 Apr, 2014
There is a bubble in initial public offerings (IPOs) that will cause awful losses for investors, the Sunday Telegraph's Questor column said. Royal Mail, with its monopoly on mail and parcel delivery and prime London property holdings, was the exception to an IPO boom that has seen companies such as Just Eat, AO World and Boohoo.com valued at 100 to 200 times profits. Investors should ask if owners are investing for growth or cashing in and whether the business has a dominant market position or protected technology. Ignore most IPOs and the shares will probably be cheaper six months later.
Fri, 04 Apr, 2014
Cash and carry outfit Booker on Thursday reported a 1.9 per cent rise in like-for-like sales for the latest quarter, or 16 per cent when sales from its recently acquired unit Makro are factored in. Interestingly, had it not been for tobacco sales, which took a hit from point-of-sales regulations and the increasing popularity of e-cigarettes, then like-for-like sales would have increased by 3.4 per cent. Total sales grew by 17 per cent to reach 4.7bn pounds and the firm ended the year with 150m pounds of cash on hand, ahead of forecasts.
Thu, 03 Apr, 2014
First Group seems to be in decent shape, given that it has four contract renewals and bids for new franchises coming up. Also, its British bus division continues to grow steadily, with like-for-like sales rising by two per cent over the last year. Meanwhile, its rail division saw revenue growth of nearly six per cent. The latter may also benefit from a lengthy extension to its First Great Western contract. The US operations, on the other hand, were one of the victims of the recent "polar vortex" Stateside. That blew a 14m pound hole in its full-year profits.
Wed, 02 Apr, 2014
Diversified mining group BHP Billiton may be transitioning from a growth stock into an income one. Analysts believe the firm could carry out a share buyback, fund a one-off return of cash and increase its dividend all over the course of the next year - in effect doubling the income from the shares. That comes as the company has taken actions to slash its costs and looks to sell un-loved assets. Analysts at JP Morgan, for example, have identified approximately 19bn dollars of the latter.
Tue, 01 Apr, 2014
Track records are important; hence, investors may want to carefully consider the investment thesis behind Quindell. The firm specialises in handling motor and household claims for insurers and now works in some way, shape or form, with the majority of the top ten insurers. Judged solely on its numbers, the company is certainly impressive. On Monday it reported pre-tax profits for the year ended on December 31st of 107m pounds, for an increase of 202 per cent on the back of a 133 per cent surge in sales. The AIM-listed company now has a market capitalisation of over 2.25bn pounds after also acquiring more than 20 companies in the two and a half years since its debut on the market.