Sunday, October 27

Weekend Sunday Newspaper Share Tips

Share Tips to Consider for this Weekend - October 27


Midas Says:

26 October
Buy Northern Petroleum - (oil and gas exploration) - shares have fallen from almost 200p in 2007 to 31.5p today, but they are now cheap.

Relatively high-risk stock, but potential rewards.

19 October
Aureus (gold miner) has delivered on all its promises so far. As sentiment towards gold improves they should move higher - buy at 30p while they are cheap.

Questor
25 October
Shire (SHP)
Buy at 2760p
Pipeline of new drugs - tight cost control.

Kyle Caldwell
DCC could be worth a look at 2755p.
Distribution and marketing services.
Cantor Fitzgerald is bullish on the stock with a price target of 3120p.

Tempus
AZ Electronic Materials, - avoid.
Segro - hold.

Investors Chronicle
Sell 888 Holdings - at 172p
Buy Persimmon at 1232p
Buy LXB at 116p
Sell Hiscox at 677p

Tuesday, October 15

High Yield Shares?

Post Royal Mail shares - what to do now? Have a cigarette?

Now you've got your Royal Mail shares money (or not) - so far the highest price post-flotation has been 489p i.e. a 48% increase - and you've made a decent 40 - 50% profit - what next? Have an electronic fag? What should you do with all that hard-earned cash?

Well, just as I was wondering the very same thing myself, those nice chaps over at the MotleyFool.com sent me an e-mail with some excellent suggestions for shares with 6% yields. I am inclined to listen when said Motley Fools speak as they are careful chappies, despite their foolish name.

So here are the shares that they have come up with for your delectation - plus some comments and pictures from me (I really am a fool).

1: Admiral (ADM)



(NB: The chart is below the 200-day moving average (black line) and chartists say that is not a good buy signal)

Over the last 12 months, Admiral (car insurance) has made payments totalling 94.4p / share. So with the shares at £12 that is a trailing 7%-plus income – yum.

However, they pay out almost all their as dividends, so that payout could be cut if profits stumble. (Do car insurance profits ever stumble? Let alone tumble).

Nevertheless, the business has done well during the recession, with both profits and dividend climbing 70% between 2008 and 2012! Car insurers - don't you just love 'em.

2: Amlin (AML)



(NB : Also below its 200 day moving average)

Another high-yield insurer, Amlin is a Lloyds operator that offers insurance to cover hurricanes etc....

Trailing payout is 24.3p per share, i.e. a 6% income at 405p.

Reported profits have been up and down over the years, and they actually reported a loss for 2011! So some unpredictability here.

All the same, the dividend was covered 2x for 2012 and increased 60% between 2007 and 2012.

3: SSE (SSE)



(NB : Also below its 200 day moving average)

Power companies - don't you just love 'em too! SSE’s plan to raise gas and electricity prices by 8% should help near-term dividends. (Thank you granny).

The group is committed to raising its annual dividend by the RPI measure of inflation, and so is on course to pay 87p per share for this year. Yum.

SSE's dividend history is very reliable – it has increased its payout every year since it was created in 1999. And between 2008 and 2012, the dividend was increased 32%. So stop moaning about your gas and electricity bills and fill your fur-lined boots with SSE shares this Christmas.

4: ICAP (IAP)


An inter-dealer broker that has recently declared a 22p / share annual payout and thus yields 6% with the shares at 364p.

But they have had their problems, - underlying earnings fell 18% last year as the company’s traditional brokering activities continue to lose ground to the electronic competition.

Nonetheless, the payout was covered 1.5 times by profits and has been raised a respectable 41% since 2008 ...

So there you have it - four shares for your consideration - this is not advice of course as you have a brain of your own and the Motley Fool is just a bunch of blokes and blokettes trying to make a living by scouring the stock market just like the rest of us. Take care and good luck.

Saturday, October 12

Royal Mail Shares Should I Sell?

What to Do with My Royal Mail Shares?

So, the government sold off the Royal Mail on the cheap as expected. How do we know it was sold on the cheap? Well, the price shot up 40%, which means it could have been sold for 400p at least instead of 330p and all those nasty spivs and speculators, (you  and me) could still have made a quick profit.

Here's a video from the Daily Telegraph's Questor on what to do with your Royal Mail shares now.



Plus the government apparently (according to the Financial Times) tried to increase the price above the 330p that had been fixed, but the bankers were having none of it and threaten to withdraw their support. So the bankers knew what they wanted and the government had to like it or lump it and blow out a whole load of sulphurous stinking smoke from the rear ends about what a success it had been, and let the banks make another pile of free money.

Joe Public got 227 shares (unless he was a 'rich' Joe Public and disgracefully applied for more than £10k despite that being one of the options and despite expecting to receive only half or a third) and could sell them and make a quick 220 quid. Except that if you were with the UK's largest stockbrokers Hargreaves Lansdown you couldn't, because their website crashed and was down all day and their telephone service was useless. People with a Hargreaves Lansdown account discovered that if ever there was a crash they would be shafted, as they couldn't trade any shares at all, not just Royal Mail shares. Lots of disgruntled Hargreaves Lansdown customers, and some of them are saying that this could be a good time to short the stock!

Lots of other punters, with other brokers, did manage to sell their 227 shares on Friday (at a rate of around 40 people a minute all day long) and presumably lots more will be selling via their brokers on Monday. This didn't stop the price rising to 455p by end of play on Friday (significantly it rose sharply in the last hour). Some analysts say the shares are worth in the region of 600p - presumably we won't see 600p on Monday but the price may well go higher than the 455p they are at now.

After Monday, comes Tuesday when the vast majority of private retail punters will be able to sell their shares and join the ranks of the spivs and speculators that Vince Cable hypocritically claims he doesn't like. So that would make around 300,000 spivs and speculators making a couple of hundred quid each. There is little  point hanging on to 227 shares for the long term, better to wait and try and pick up a larger more meaningful amount if the price falls back. So all this cobblers about helping the small investor is just that, cobblers.

It is quite possible that the share price will fall on Tuesday - so I will be selling mine on Monday.

At some point it might be worth buying some Royal Mail shares on the open market if the price falls back significantly, so I will be watching the price over the next days and weeks.

That's my thoughts on the Great Royal Mail Share Robbery.

Friday, October 4

Royal Mail Shares Worth Buying?

Should I Buy Shares in the Royal Mail Share Offer?

Well, Questor from the Daily Telegraph says "Get in quick and buy Royal Mail shares ... act quickly to ensure you don't miss out on this income stock"

Questor is very well respected and generally knows what he's talking about, so who am I to argue? he also explains that "Demand for the shares is very strong. Orders from institutions filled the order book within three hours of opening. Retail investors ... have an allocation of 30pc of the float, but they should act quickly."

Here is a Questor video briefly explaining whether the Royal Mail offer is a good buy or not.


What will the share price be?

Originally it was stated that the price would be between 260p and 330p but in the last few hours it appears that the price will be at the upper end of that range, due to the strong demand.

There are unofficial rumours that they will start trading around 10 to 15% higher than the offer price.

Trading will being on Friday 11th October but bear in mind that as a retail investor you won't be able to sell any shares until the 15th October.

David Buik has apparently said on Twitter ‏@truemagic68 1h "Panmure getting great vibes that Royal Mail IPO will be heavily over-subscribed! 330p may be issue price. 375-380p possible early dealings"

Other comments :- Bookmakers in the Square Mile suggest shares in Royal Mail will soar on their debut.

Stockbroker Panmure Gordon has said - Its prognosis: depending on the float price the shares could be a raging 'buy'. "We believe Royal Mail Group represents an excellent investment opportunity", Gert Zonneveld, a Panmure research analyst.

"The indicative share price of 260p to 330p suggests an exceptionally good entry level for investors" The Times.

How many Royal Mail shares can you buy?

You can only apply for certain specified amounts: £750, £1,000, £1,500, £2,000, £2,500, £3,000, £4,000, £5,000, £6,000, £7,000, £8,000, £9,000, £10,000, £15,000, £20,000, £25,000, £30,000, £35,000, £40,000, £45,000, £50,000 and then £50,000 or above in £10,000 increments.

The number of shares you actually get will depend on demand, and as demand is expected to be strong it is very likely that your shares will be 'scaled back' so you will only get a percentage of what you applied for.

Why is the share price likely to rise?

Well, this is a big Tory moment, so they won't want it to fall flat - so their chums in the City should make sure it doesn't.

Also the Royal Mail carries parcels and with more and more people buying their stuff online, parcel shifting is a growing business.

Where should you buy them?

You can sign up for an account with brokers such as Hargreaves Lansdown or  iii (checkout the link in the margin or at the top) - personally I can't recommend TDWaterhouse or anything related to them (spit).

Hargreaves Lansdown will be open over the weekend exceptionally to deal with the Royal Mail offer. if your are using a broker you need to buy your shares by 8th October - alternatively you can use your legs and wander off to the Post Office for an application form.

All in all I will be getting a few and would get a few more if I had the available cash!