Sunday newspaper share tips

By THIS IS MONEY
Updated:

 

Each week, we round up the main share tips from the Sunday newspapers. For the Financial Mail's stockpicker Midas go to thisismoney.co.uk/midas.

For This is Money's mid-week share tips round-up, click here.

Sunday Telegraph

Sell shares in Debenhams (150½p), the department store retailer that has become a byword for the perils of private equity ownership. The 130-odd store retailer was floated last May at 195p a share after just over two years in private equity hands.

With a price earnings ratio of 12 times (compared with 17 times for the sector), the shares look cheap. But don't be tempted. It could get worse before it gets better. Sell.

Dignity (704p) is now one of Britain's biggest undertakers, beaten only by the Co-op.

Since listing three years ago, Dignity's shares have tripled in value. They are now trading on about 21 times 2007 earnings - not cheap. But the business generates phenomenal amounts of cash, and was able to return £80m to shareholders last year, topping up a dividend yield of about 1.5%.

Dignity should be a comparatively safe, non-cyclical option for long-term investors. But the current rating means the management team has little room for error. Panmure Gordon has a target price of 810p on the stock, while KBC Peel Hunt has a target of 910p. Even if those targets are optimistic, the company's cash generation will continue to make it attractive. Buy.

Shares in Filtronic have fallen from peaks of more than £22 in the dotcom bubble to 121p today. Our last advice in late 2001 was to take some profits, cashing in on a short-term bounce. Is it time to get back in?

Upside to the current price seems reliant on disposals, which makes it a high-risk play. The stock is also volatile, which can make timing a buy instruction tricky. But for speculators hunting value in a bubbly market, it could be worth a look. Speculative buy.

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