Sunday newspaper share tips

By THIS IS MONEY
Updated:

 

EACH WEEKEND This Is Money brings you a round-up of the shares being tipped in the Sunday newspapers' City Pages. For the Mail on Sunday's hugely popular Midas column click on the first link under More... on the left further down this page.

Sunday Telegraph:

MOBILE phones retailer Carphone Warehouse (145p) is expected to increase its marketing spend over the coming months, but the group expects connections growth to slow to 15% next year from 29.6% during the fourth quarter. It is a well run business, but with little prospect of substantial upside soon. Sell.

UTILITY company National Grid Transco (432p) predicted last week that earnings per share would be substantially ahead of last year. Merrill Lynch has raised its earnings estimate for the group for the full year and says fair value for the shares is 510p. It should also reap significant rewards from the expected sale later this year of up to four gas distribution businesses. Buy.

Sunday Times:

DRINKS group Diageo has solid long-term growth prospects in Asia and Latin America and plenty of scope for brand extensions. It last reported operating profits of £1.2bn on half-year sales of £5bn. At 723.5p the shares offer a yield of 3.6%, making Diageo look a compelling long-term bet.

TECHNOLOGY consulting and investment firm Generics Group announced plans on Friday for a £7.3m rights issue, without which it will run out of working capital by mid-May. The group has found cost-cutting tough and unpleasant, and it cannot inspire confidence after management took the company so close to the edge.

The Business:

GLOBAL terrorism continues to weigh on airline British Airways but the company should be in the early stages of a cyclical recovery. Analysts expect earnings before interest and tax to be around £369m for the year just ended. Brokers Williams de Broe and Merrill Lynch have buy ratings on the stock, but Oriel Securities says reduce. Gerrard has it as underperforming relative to the sector, and says it is vulnerable to reductions in yields and passenger numbers.

HOUSEBUILDER Bellway is hoping to grow volumes by around 6.5% a year at higher margins. Broker Numis says the group's land bank looks strong, with up to five years worth of land, although the company itself estimates it has three years. The group, which is neither a niche player nor a volume leader, could also be vulnerable to takeover. Numis has a target of 840p for shares, which closed at 803.5p on Friday.

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