Sunday newspaper share tips

By THIS IS MONEY
Updated:

 

Each week, we round up the main share tips from the Sunday newspapers...

Pile of newspapers

Read Financial Mail's Midas share-tipping column, HERE.

Sunday Telegraph

Oil services group Petrofac, which designs, builds and operates oil and gas facilities, has more than doubled its order backlog this year to 8.2bn US dollars (£5bn) after a series of contract wins in the Middle East.

Keith Roberts, chief financial officer, said last week the group had not reduced its margins to win the new business and added that Petrofac had good revenue visibility 'well into 2011 and beyond'. With the price of oil at a seven-month high above 70 US dollars a barrel, it is likely that oil companies will be more comfortable with spending plans. Shares are still rated a buy at 664p, despite rising 42% since mid-March.

Energy and mining services group Cape has been confounding those who have been downbeat on its prospects. On Friday it unveiled more contract wins - all of them in the gas-rich emirate of Qatar. The first is a three-year maintenance contract to supply access, insulation, fireproofing, refractory, painting and general civil work at Qatargas's onshore and offshore facilities.

Cape has also won access and insulation works deal for the ORYX gas-to-liquids plant in Qatar. The shares were 65.5p in March and have added 182% since then. However, with revenue visibility improving and the company continuing to win new contracts, the shares remain a buy.

India-focused miner Vedanta Resources said on Friday it planned to offer one billion US dollars of convertible bonds which it will use to fund its expansion, make acquisitions and increase stakes in its subsidiaries.

The group expects to pay 4.5% to 5% on the bonds which will be due in 2016, a solid move despite the fact the shares slid more than £1 after the news was announced. Vedanta is predicted to grow its earnings substantially over the next few years. The long-term outlook for the group looks very bright for investors that are keen to get Asian mining exposure. Shares are a buy at 1599p.

Mail on Sunday

Hardy Underwriting Group has gone from strength to strength since chief executive Barbara Merry took the helm in 2002. Results for 2008 showed a 26% increase in pre-tax profits to £23.1m, while the dividend rose by 10% to 12.1p.

The results were published in February, but last month Hardy produced a trading update for 2009 that was even more upbeat. Currently the price of cover is rising, which means that Hardy's profits should increase unless it is caught out by some catastrophe and has to pay out millions of pounds in claims. Hardy is expected to make £25m this year, but next year it should make serious progress as the economy recovers and the benefits of the share placing kick in.

Hardy shares are trading at 263.5p, but supporters in the City believe the shares are worth more than 330p. Buy.

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