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Sunday tips round-up: Thomas Cook, CWW, Lookers
Thu, 09 Feb, 2012
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Sunday tips round-up: Thomas Cook, CWW, Lookers
Sun, 15 Aug 2010, 13:46:00
The sun is no longer shining on travel operators but though there are worries about a double dip recession, Britons are unlikely to give up their summer breaks, which is good news for <b>Thomas Cook</b>. The company's shares headed south last week after a profit warning, as low consumer confidence and good weather in Blighty persuaded more holidaymakers to opt for a "staycation" rather than flying off to foreign climes. The sensitive market backdrop means that the group does not expect demand to bounce back in the UK in the near future, but there are signs of some improvement in central Europe, with German bookings rising 3% this year, the Telegraph notes. With other travel companies going to the wall - Sun4U was the latest last week - the competitive environment is improving for larger players such as Thomas Cook and <b>TUI Travel</b>. Thomas Cook shares are trading at a discount to TUI Travel, which the Telegraph believes is unjustified. This valuation gap will close by either TUI shares falling or Thomas Cook shares rising, and the Telegraph thinks the latter is more likely to happen because of the impressive yield that Thomas Cook offers. The Mail on Sunday has revisited its <b>"Dogs of the Footsie"</b> portfolio, as it does every three months, and commented on the addition of <b>Cable & Wireless Worldwide, Home Retail Group</b> and <b>National Grid</b> to the portfolio of unloved stocks. Both telecoms firm <b>Cable and Wireless Worldwide</b> and Argos and B&Q owner <b>Home Retail Group</b> are struggling for specific reasons, but for investors in the Dogs portfolio, the most important issue is whether their problems will affect their ability to pay the dividend, and in both cases, brokers believe the payouts are secure, at least for now. <b>National Grid</b> has been in and out of the portfolio for years. Committed to paying a steadily increasing dividend to shareholders, the company slipped out of the portfolio in May, but has now returned, the Mail on Sunday notes. Overall the Dogs portfolio has risen in value since May - by 4.4% - but it still lags the FTSE 100 by a considerable margin. The experiment has not been working well, the Mail on Sunday concedes, but investors can take comfort from their dividend income, with the portfolio's stocks yielding between 5.8 and 7.2%. Car dealership <b>Lookers</b> is set to release interim figures on Wednesday and if last month's trading update is anything to go by things may not be so bleak as feared, though half year numbers are likely to be lower than in 2009. New car sales fell in July, the first drop in a year, the Society of Motor Manufacturers and Traders (SMMT) recently said. However, car sales are still 15% ahead of last year for the year to date as a whole. The SMMT expected more than 2m new cars will be sold in 2010, the Telegraph notes. The paper has previously recommended the shares when they were at 50p. Since then the shares have gained 9% while the market as a whole has risen just 2%. Trading on a price/earnings ratio of 9.2 based on projected 2010 earnings, falling to just 8.5 on next year's projected earnings, and with a yield of 3.1% the shares are still good value, the Telegraph reckons. Please note: Digital Look provides a round-up of news, tips and information that is impacting share prices and the market. Digital Look cannot take any responsibility for information provided by third parties. This is for your general information only as not intended to be relied upon by users in making an investment decision or any other decision. Please obtain a copy of the relevant publication and carry out your own research before considering acting on any of this information.
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