Sunday newspaper share tips

By THIS IS MONEY
Updated:

 

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

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In focus: Who is tipping what in the Sunday papers

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HMV Group

HMV Group is one of the best-known names in the music and DVD market and a leading bookseller too, through its ownership of Waterstone's. Recently, books and DVDs represented about a third of total sales while music accounted for about a fifth of sales. Games and technological gadgets made up the rest.

This mix unnerved City analysts, but the company is decreasing its focus on music and DVDs and improving its range including screen-based entertainment, ie computer consoles and games, and has a recommended £46m offer for gig venue owner Mama Group. It has even started a joint cinema venture.

Five years ago HMV shares were trading at more than 250p. Now they are 92.55p. There is the prospect of an expected 7.4p dividend, which puts the shares on a yield of nearly 8%. This is generous indeed, particularly in the current low-interest environment. Buy.

Cadbury

Patriotic investors may wish to keep hold of all their shares. Pragmatic investors may do better taking some profits and selling half their holdings.

NCC Group

NCC Group does everything in its power to hack into companies' computer systems and steal valuable data from under the noses of the employees. But that is to test security rather than profit from illicit information.

Fear about data theft is high. NCC shares are 397.5p, having come from a low of about 300p in the summer. But there is still plenty of mileage in this stock. Buy.

Sunday Telegraph - Questor

Vedanta Resources

Questor admits it has been overly cautious on Indian-focused miner Vedanta. An early buy recommendation was switched to a hold last July, but the shares have continued to rise. Taking future production growth into account, Vedanta is a buy once more. Its cash position has enabled it to invest through the downturn and it is looking for acquisitions, particularly in favoured commodity plays iron ore and copper. Goldman Sachs forecasts Vedanta's revenues will rise 174% between 2008 and 2013 and 60% of its metals are sold to the Indian market. Shares trade on a March price-to-earnings ratio of 23.8 but that would fall to a better value 11.3 in 2011 and 7.7 in 2012, based on forecasts. The dividend is a mightily unimpressive 0.9%, however. Buy.

Tate & Lyle

Buying Tate & Lyle last June, when tipped, would have locked in a nice 7.5% yield and a 30% capital gain. The yield makes the shares a long-term hold, despite price falls this week. Credit Suisse downgraded the shares this week to outperform, saying the sugar rush is weakening. The group issues an update on 28 January and this will provide insight into the future. For now the shares remain a hold, despite the drifting stock price.

Sunday Times

Private equity houses have become trapped in a world of the living dead, desperately trying to turn round investments and raise finances. Sovereign wealth funds and pension funds are avoiding pouring more cash in and investors are nervous, but positive signs are emerging.

For ordinary investors the best way to get involved is by buying shares in a private equity fund. But beware, the sector is volatile and blighted by illiquidity so only for the risk takers. If you can stomach this now may be the time to get in at the bottom.

HGCapital Trust

HG Capital Trust specialises in buying up medium-0sized companies, valued between £70m and £700m in Britain, Germany, Benelux countries and the Nordic region. It has had a comparatively good recession, with a portfolio of 20 active investments of which the top 10 account for 90% of its value.

Businesses tend to be good and varied. Visma does Nordic accounting software, Pulse, provides contract nurses to the NHS. HG has no borrowings and 40% of assets are in cash, so it could pick up bargains in the next 12 months. Its balance sheet could survive a turn for the worst in the economy. During the past five years it has been a top performer in the private equity sector, but the City is wise to its charms. Shares trade at 836p, a slim 5.8% discount on its net asset value. The short term upside is limited but those taking a medium term, five-year, view could be interested.

SVG Capital

Unlike HG, rival private equity firm SVG has had a torrid year. Its shares trade at an 18% discount to net asset value, so it may represent more of a bargain. However, last year's performance was decimated by fund raising and penalties imposed after reducing exposure to a Permira fund.

It is not currently making new investments, but its existing portfolio contains some gems including New Look, Birds Eye and Saga. Many could float if 2010 proves fortuitous and that would bring windfalls for SVG.

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