Tuesday tips round-up: British Airways, Travis Perkins, Psion
British Airways has become well practised at dealing with exceptional crises, such as terrorist threats and extreme weather disruption, but the events of the past ten days have rocked it like never before.
The company's share price has halved in the past year and there appears to be little sign that the situation will improve. The downside risk that BA faces this year is far greater than the upside and its stock at present is as uninviting as its new terminal says the Times.
The last 12 months have been something of a revelation for Akers Biosciences. The AIM-listed group develops and makes diagnostics products, including alcohol breath-testing devices, which it sells to the US military.
Independent analysts reckon the fact that the US military has contracted with the group "is not bad at all", and that investors should be interested. Buy says the Independent.
Travis Perkins, owner of the Wickes DIY chain, spent £5m yesterday on a 30% stake in Toolstation, the screws and rawlplug home delivery specialist. Travis has lost more than half its value in the past year. If consumer spending continues to fall as a result of higher household bills, no amount of acquisitions will insulate Travis from the pain says the Times.
The Telegraph counters that the recent share slump has pushed Travis's valuation to the point where they trade on a forward earnings multiple of just over seven and yield an estimated 4.6%. At such attractive levels, the time to buy back quality shares cheaper has finally arrived.
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Miner Anglo-American has largely missed out on consolidation speculation and got on with divesting non-core assets. As a result, its share price has barely budged since last year, but it has a huge portfolio of assets experiencing big price rises. It is the most likely miner to have hidden value yet to be spotted by the City says the Times.
Rugged computer specialist Psion has grown its top line relatively well but has been held back by weakness in the US, which remains a concern. New chief executive John Conoley is expected to outline his plans in the summer. In the meantime, the shares are worth holding on to trading on less than 15 times forecast earnings and yielding 4.4% says the Telegraph.
De La Rue has been one of the stock market's stars over the past five years, outperforming its sector peers. Its shares trade on heady 16.4 times forecast earnings, which looks fairly full. Investors looking for capital growth would be better off seeking opportunities elsewhere, but existing shareholders who favour income should hold on says the Telegraph.
Insurance services group Charles Taylor targets stable improvements and chief executive John Rowe points to the long-standing relationships it has with its clients as a reason to back the stock. Buy says the Independent.
Sausage maker Cranswick is over its early year wobble when its share priced dropped from 769p on 31 January to 560p just five days later. Better sentiment will see the stock rise. Buy says the Independent.
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