Sunday tips round-up: Experian, Tanfield, Lookers
Experian has spread the risk, using the vast amounts of cash it generated to buy price-comparison websites LowerMyBills.com and PriceGrabber.co.uk in recent years as well as credit checking operations in the, perhaps, safer haven of emerging economies such as Brazil.
A push into the telecoms and public sector markets has also reduced its dependency on financial institutions. And its $2.9bn of debt remains manageable.
Nevertheless, there's too much potential for more bad news to buy into the shares now - even though its trading ratio has almost halved to just 10.5 times 2009 earnings and its dividend yield doubled to 3 per cent since the start of the year to reflect its slower growth prospects. Sell, says the Telegraph.
Tanfield's shares are trading on a price/earnings ratio of 27 times current estimates, but this falls sharply to 14.7 times for 2008. The fundamental products seem to be working but it has become a classic favourite for bearish investors who take a short-term punt on shares in the company, which is highly liquid for its size, falling further. For the bold long-term investor, this might represent a good opportunity to pick up some stock, says the Telegraph.
Car dealership Lookers failed to slam the brakes on the tumble in its share price this week when it tried to convince investors that it should not be a casualty of the credit crisis.
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While there is little sign of recovery in the motor market, and the company is sitting on rising interest costs due to recent acquisitions, it is unlikely to be an easy ride. Still, the shares are worth holding on to in anticipation of the consumer environment improving at some stage, says the Telegraph.
Axon Group, the IT services business, has been hit hard by fears that its contracts are about to dry up as the broader economy falters. There have also been concerns about the decision of chairman Mark Hunter to stand down.
A trading statement in November said that the group was still on track to meet the expectations of analysts, leaving Axon trading on about 10 times forecast earnings. Analysts have price targets which suggest that the shares can double, back towards the direction of the levels reached just a few months ago. Axon is definitely worth a look, says the Telegraph.
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