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Thu 23 May 2013
At a 33 per cent premium to their net asset value one could be forgiven for worrying that shares of Great Portland Estates are considerably overvalued. After all, that was the valuation reached just before the Great Bubble burst, with an all too familiar ending. Further, the company is essentially a big bet that the London office market will continue to thrive in the long-term. Having said that, the current Chief Executive has 'called the market' correctly before and in the last downturn the company bought land on the cheap. Significantly, 81 per cent of the firm´s assets are in the West End and not just in London. This area has not seen the sort of rental growth witnessed during the early Noughties. Even so, there is no harm in taking some profits on shares that have outperformed, says The Times´s Tempus.
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Wed 22 May 2013
Despite the falls evident in yesterday´s quarterly results, in what has traditionally been its main performance metric -organic service revenues - any weakness in Vodafone´s share price looks like it would be a buying opportunity, says The Times´s Tempus. Above all, it is hard to see how the situation with Verizon will not work itself out in its favour. Furthermore, the telecoms operator will likely bid for spectrum licenses when they come up for sale in countries such as Hungary, South Africa and India, for example. Then there are the prospects for Voda´s share of profits out of Verizon, which increased by almost a third in 2012.
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Tue 21 May 2013
While it may be true that ENRC may be worth more as a privately held company than as a listed concern minority owners deserve more than the 260p per share offered by the group’s founding oligarchs and the Kazakh government, which amounts to daylight robbery, the FT’s Lex column muses. For one, said bid price values the company at barely 2.5 times its 2013 earnings before interest, tax, depreciation and amortisation costs (EBITDA) versus the 5 times EBITDA on which Kazakhmys and Rio Tinto are now trading, for example. And on a ‘sum-of-the-parts’ basis ENRC may be worth 6 pounds, some analysts think. On the other hand, the paltry sum on offer may be the only thing propping the share price up.
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Sun 19 May 2013
Thomas Cook still has a long flight ahead of it, but the new Captain at the controls seems to have stabilised the craft. In fact, things now look normal. Above all, the company needs to sharply improve the experience of its customers, quite a challenge. However, the 1.6bn pound capital restructuring announced last week means that the outfit now has a fighting chance. Then there are the upwardly revised cost-savings targets and plans to rationalise its airlines and dealings with hotels. The travel tour operator may be headed for a sunnier future, says The Sunday Times´s Matthew Goodman.
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Fri 17 May 2013
Stock of Bovis Homes, along with its peers, saw an extraordinary surge in its share price yesterday, up 12p to 765p, almost twice where it was last June. The stock is approaching a 30% premium to their estimated net asset value; this seems to be building in an awful lot of the future growth expected by analysts. "Not a bad time to take some profits," writes The Times’s Tempus.
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Thu 16 May 2013
Change is in the air at HSBC. The lender has been right to concentrate on cost-cutting, having exited 50 businesses and announced roughly 44,000 lay-offs since 2011 – even if its cost-to-income ratio has risen over the past three years. Indeed, banks have been at pains recently to show investors that they can still grow, but HSBC does have greater exposure to emerging markets, while “soggy” top lines are being me with a renewed focus on efficiency and returns, with the lender’s pay-out ratio having improved from 47% in 2010 to 55% last year, the FT’s Lex column writes.
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Wed 15 May 2013
Icap is fighting to restructure and survive. Hence the very positive market reaction on Tuesday when it announced that it would beat its target for cost savings. Far more important even, traders breathed a sigh of relief that it did not cut its dividend payment. Nevertheless, a 12 per cent revenue decline alongside pre-tax profits off by 20 per cent at 284m pounds shows how difficult it is to align costs with declining markets. In addition, there are pending regulatory changes the impact of which, positive or negative, is hard to discern. Icap has been dragged into the Libor scandal, and if found guilty, could face a fine of up to 25m dollars. "The yield of 6.5 per cent may look attractive, but, given the uncertainties, I would be in no mood to chase," The Times´s Tempus says.
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Tue 14 May 2013
Authorities attempts to create a challenger to the main established lending groups – RBS, Lloyds, Barclays, HSBC - are in a state of disarrray after Moody´s six notch downgrade of Co-op last week. Simply put, creating a large new lender is far more difficult and risky than many appreciate. In any case, the fact remains that the sector´s main players continue to dominate the current account market, of which they still possess over 70 per cent. The lesson to be drawn from the above may be that a bunch of focused, niche banks - such as Aldermore – could be a bigger threat to the big four banks than any Frankenstein-like creation which the government may try to spawn, says the FT´s Lex column.
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Sun 12 May 2013
Engineering outfit Invensys seems to have finally gotten its hands around its problematic pensions deficit, such that it is no longer a deterrent to would-be investors. In fact, should the company maintain its guidance for its pensions deficit steady – when it unveils its annual results – that may well clear the last remaining obstacle to a bid. In fact, once a premium is factored in then the bid price could reach about 4bn pounds – with Schneider Electric of France and America’s Emerson thought to be the most likely suitors. Ironically, that would suffice to clean out said pensions liabilities. No surprise then that the company´s share price has doubled in the last twelve months, writes The Sunday Times´s Matthew Goodman.
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Fri 10 May 2013
FTSE 100 retail property developer Hammerson yesterday delivered a mixed trading update. However, the company does seem to have a good long-term strategy in place, of exiting the London office market in favour of local retail space, which - it must be said - goes against current received wisdom. To that one must add the strong pipeline of assets coming along. In fact, the company is forecasting earnings growth of 25% over the next three years. Nevertheless, the fact that it is now almost trading at its net asset value means that immediate progress may be limited.
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Thu 09 May 2013
Retailer Next is facing a "new normal," something which its Chief Executive, Lord Wolfson of Aspley Guise, describes as an environment where the shopper is careful with his or her money and retailers can no longer expect an automatic year-on-year rise in like-for-like sales. So much so in fact that analysts believe that a sales rise across the group of 2.2 per cent in the 14 weeks to last weekend masks an underlying fall of about 4.4 per cent. Nevertheless, the company continues to generate more than sufficient cash to continue with its current share buy-back policy. Those buybacks, and the prospect of special dividends, then, provide a strong support, and Next looks like one of the few retailers worth having in the present environment, The Times´s Tempus writes.
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Wed 08 May 2013
Despite the fact that the restructruing of National Express Group has already progressed far yesterday Dean Fitch announced an ambitious target to lower net debt to twice its earnings by the end of 2014. That can only further consolidate the company´s financial health, with fears of threats to its dividend now a thing of the past. However, despite the support offered by a 5 per cent dividend yield the company continues to face difficult conditions in the UK and a highly competitive enironment in the American Schools market. The shares are trading in the middle of their typical range (…) and selling on just under ten times’ earnings. Nevertheless, while the yield is attractive, there isn’t much else to go for, writes The Times´s Tempus.
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Sun 05 May 2013
BP’s first quarter results beat analysts’ expectations by 35 per cent driven by strong trading, lower costs and production of higher-margin barrels.
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Fri 03 May 2013
In spite of falling operating profits and production in its first quarter, oil and gas outfit BG Group still beat expectations with its results yesterday, according to the Tempus column in The Times.
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Thu 02 May 2013
The Tempus column in The Times has given a cautiously optimistic outlook for engineering firm Weir Group despite the company reporting a weak first quarter yesterday.
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Wed 01 May 2013
The Tempus column in The Times says that it's hard to avoid the suspicion that Imperial Tobacco and other tobacco producers are businesses in 'managed decline'.
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Tue 30 Apr 2013
While Aberdeen's first-half report sparked a share-price surged to an 11-year high on Monday, the Financial Times' Lex column says that the asset manager is not without its problems.
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Sun 28 Apr 2013
Internet fashion retailer ASOS is in fashion and will continue to be so for some time to come. Yes, the company´s latest trading statement - due out on Tuesday - is likely to show that gross margins suffered this past fall and winter as the outfit "invested" in more customer traffic via price reductions. Yet that is likely to turn out to have been "a pause to refresh," and it worked. Sales have shot up by a third over the last half-year. Thus, some analysts see the shares rising towards 40 pounds over the next couple of years as investments in its on-line presence in Russia and China pay off. As well, the shift towards its own-label products has proved to be a hit with customers. Further, ASOS has stregthened its management team with Kate Bostock, who´s coming on board from Marks&Spencer. "The outfit is on the right side of the online revolution. Buy," says The Sunday Times´s Danny Fortson.
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Fri 26 Apr 2013
With the motor market under a great deal of regulatory and political scrutiny, The Times' Tempus column has recommended investors to stay clear of Admiral following its 'unimpressive' trading statement on Thursday.
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Thu 25 Apr 2013
The terms of construction services group Kier´s buy-out offer for May Gurney appears to constitute a significant improvement on the Costain bid. It is 25 per cent larger and has a cash element worth 50p a share too. Further, a transaction would reduce the former´s dependency on construction while strengthening its product offering in the services space. As well, the transaction more than meets its target for return on capital employed. It very much looks like a "knock-out" offer. Nevertheless, "await developments," says The Telegraph´s Questor team.
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