Wednesday tips round-up; Pearson, Greggs, Bunzl
Pearson faces pressures in financial advertising at the FT Group while Penguin’s performance is flat.However, underpinned by US stimulus spending and the natural hedge between higher US college enrolments and weaker US school budgets, Pearson should continue to prosper in North America while its other overseas businesses mature. At 858˝p, or 14 times earnings, hold says the Times.
On Tuesday, Greggs, the sausage roll and pasty retailer unveiled a very ambitious – but achievable – expansion plan. The market did not react well to the news, but this has provided a buying opportunity. The shares are trading on a December 2009 earnings multiple of 13.8 times and yielding 3.5%. Good value. Buy says the Telegraph.
JSM Indochina, an AIM-listed property fund focused on Cambodia and Vietnam, does not look like the typical target of activist investors, but Passport Capital, a San Francisco-based investor holding a 13.4% stake, is to requisition a special general meeting. In short, it wants Craig Jones and two other directors to be removed and replaced by its nominees; surplus cash to be returned to shareholders; and a comprehensive review of the company’s investment strategy. However, at 69c, with Mr Jones sitting on 14.6% and with the voting intentions of other big shareholders unclear, there is better value elsewhere. Pass says the Times.
Bunzl does not provide its clients with their main stock in trade but all the consumables they use in day-to-day business, be that coffee cups, carrier bags, labels, toilet rolls and cleaning items. The benefit to the consumer is that Bunzl can source its goods internationally, saving costs, and provide a one-stop shop for its clients to order such goods. The shares are trading on a December 20099 earnings multiple of 12.5 times, falling to 11.8 next year. The yield is 3.3%. Buy says the Telegraph.
Today's Headlines
Boomerang Plus (BOOM) | Price: 78.50p | Change: 1.91% Investment Column:Boomerang Plus Bunzl (BNZL) | Price: 652.50p | Change: 0.08% Questor:Bunzl Greggs (GRG) | Price: 448.00p | Change: -3.72% Questor:Greggs Mothercare (MTC) | Price: 601.00p | Change: -0.75% Questor:Mothercare Pearson (PSON) | Price: 860.00p | Change: 4.44% Tempus:Pearson Record (REC) | Price: 80.75p | Change: -3.10% Tempus:Record Xstrata (XTA) | Price: 1,002.00p | Change: -2.43% Investment Column: Xstrata |
| P/E: 4.2 | Div Yield: 0.0% 
| P/E: 12.4 | Div Yield: 3.2% 
| P/E: 12.0 | Div Yield: 4.1% 
| P/E: 18.6 | Div Yield: 2.4%
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