Sunday newspaper share tips

By THIS IS MONEY
Updated:

 

We round up the key stock picks from the Sunday newspaper business sections: this week, Greene King, Mothercare and RSA Insurance.

Newspaper's

Hot off the press: What is Fleet St tipping?

Mail on Sunday

Suffolk-based pubs and brewery group Greene King are an example of a company that has continuing growth in their sector and has expansion plans, and earns the focus of Midas this week.

There's also an update on previous pick Mothercare. Cautious investors should cap their losses now. But if you are willing to leave this investment for the long term, hold, says Midas.

›› Read the full Midas column

The Sunday Telegraph

More Than parent RSA Insurance revealed the impact of soaring weather-related claims on profits last week.

Pre-tax profits fell 14% to £474m in the year to December, while its combined operating ratio (COR) - an industry measure of claims and costs as a percentage of premiums, where anything below 100% is a profit - hit 102.2% in the UK as a mammoth weather bill took its toll.

But the wider group's COR was 96.4%, which means it was still writing profitable insurance business as a whole.

It also stressed that, given the UK market is now fairly mature, it is setting its sights overseas for new customers.

The shares were first recommended at 117.6p in June last year and have since added 20%, compared with a FTSE 100 up 17%. Investors are advised to buy for the yield.

The Sunday Times

Goldman Sachs estimates that now is the first time since 2002 that HSBC's loan book will have more exposure to Asia than North America. As a percentage, the region's importance will fall over the next three years, but only because the bank is doing well in North America once again.

After a giant impairment produced a $7.7bn loss at the division in the 2009 accounts, America should nearly break even when the bank reports annual results tomorrow.

All this makes it a better bet right now than Standard Chartered, which is forecast to report a $6bn annual profit on Wednesday.

HSBC stock is flattish on a year ago but the market hasn't priced in the improvements ahead. Trading on less than 11 times this year's forecast earnings, it looks the better value play on emerging markets.

Like a problem student at the back of the class, Pearson's dividend is in danger of falling behind. The FT publisher promised four years ago to raise its payout more in line with earnings than inflation, with a desire for earnings to twice cover its dividend.

Since then, earnings have risen 76% and the dividend, due to be twice-covered when announced with annual results tomorrow, is up 30%. Time to step things up?

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