Sunday share tips: 1 Spatial, Babcock
The Financial Mail on Sunday's Midas column tipped shares of AIM-listed 1Spatial to its readers, citing the untapped value of its "sophisticated software" and large market opportunity for its services, including for technology giant Google.
Spun out of Cambridge University over 40 years ago, the firm's software allows clients to draw detailed three-dimensional maps at local, regional or national level.
Its business is growing quickly too, including in the States, and the essential geographical data that it provides has been valued at over £100bn, the tipster explained.
In the case of Google, the company' software allows the technology giant manage its offices, from where to place desks to the electricity requirements for each site.
Another client, but this time in the UK, is the government itself, which is creating a National Underground Register that includes all sub-surface pipes, cables and tunnels in digital map form.
"The shares are 35p and should increase materially as chief executive Claire Milverton rolls out her strategy for growth," Midas said
"1Spatial is a clever business, providing a much-needed service that can save lives and money. At 35p, the stock is a buy."
Babcock shares have had a good start to the year, but an expected rights issue and with the results of an accounting inquiry expected in May, the shares are best avoided for now, says The Sunday Times's Sabah Meddings.
Writing in her 'Inside the City column', Meddings explains how the stock has been boosted at least in part by vague takeover speculation.
Furthermore, it must be noted that the accounting inquiry into the carrying value of contracts on its balance sheet was initiated by the company's new boss, David Lockwood.
That, said Meddings, shows that the new management wants to draw a line under investors' concerns and move forwards.
Nevertheless, the firm's net debt has risen from £871m at September end to £1.2bn and may grow further as the company's business has been.
The company remains well within the limit on leverage set in its debt covenants, with net debt at 2.7 times' core earnings against the upper bound of 3.5 allowed.
Even so, she said, "with the threat of dilution and the accounting inquiry to come, Babcock is best avoided for now."