Sunday tips round-up: Pearson, Xchanging, Davenham
Pearson's board is certainly confident and has proposed a dividend increase of 7.8 per cent to 31.6p in May, subject to shareholder approval next month, which gives the shares an attractive dividend yield of about 5 per cent.
The Sunday Telegraph agrees with Citi, which believes the current weakness in the share price, and particularly any further falls, presents a good buying opportunity.
Xchanging has £98m in the bank and is keen to expand in North America and Asia. Most of its growth has been organic but there are plans to acquire businesses at the right price in the right place and of the right ilk.
Xchanging is a fastgrowing, well-run business and it operates in a growth market. The company is liked by the City and should go far. Buy, says the Daily Mail.
Davenham chief executive David Coates claims an excellent relationship with its own banks, and says new risk management procedures put in place by David Bowles, formerly of GE Capital, have helped it improve credit management.
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This week's results appear to show that the strategy is working. On a multiple of 4.5 times next year's earnings, Davenham looks cheap and could offer the brave investor good returns. However, it is certainly not one for the faint-hearted, says the Sunday Telegraph.
The Daily Mail adds that investors who bought last August should be patient. New investors should buy and sit tight.
On 12 times earnings and yielding 2.5 per cent, International Personal Finance, on the face of it, look far from a bargain. But the growth profile, and exposure to emerging markets, mean the potential upside is significant. Again, the risks are considerable, but for those who can afford to lose, the shares are a buy, according to the Sunday Telegraph.
On a little over four times 2008 earnings, AT Communications looks cheap. Buy, says the Sunday Telegraph.
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