Mindful Money’s Monday share tips: Prudential, Morrison, Antofagasta and Homebase

10th March 2014


This week investors will be keen to hear how Prudential’s results shape up against the recent welcome update from its competitor Aviva and how Morrisons is faring in the UK’s supermarket battle writes Philip Scott.

However before that, Tuesday sees Chile-based copper miner Antofagasta, update the market with its fourth quarter results. 
Antofagasta has already reported full year production, which showed that both copper and gold production beat its targets.

Following an 18% fall in the value of its stock over the last year, investors will want to know how this has reflected on revenues and the net income figures, especially given the fact that both metals experienced a slide during last year.

Sheridan Admans, investment research manager at The Share Centre, who has the stock down as a ‘hold’ says: “Updates on expansion projects would be welcome, along with news of whether the company plans on returning further capital to investors.

Wednesday sees insurer Prudential, publish its fourth quarter results. After witnessing its share price firm by 34% in the past 12 months, and following Aviva’s upbeat report last week, investors will be keen to see if it can keep up the positive momentum in its operating profits, which has been led in recent times by growth in its US and Asian operations.

Admans, echoing the market consensus, lists the shares as a ‘buy’. He says: “Given the improvement in markets and investor sentiment shareholders will be looking to see if M&G, Prudential’s wealth management operation, can continue to attract strong levels of inflows as it continues to expand its operation across Europe.

On Thursday Homebase and Argos owner, Home Retail Group reports its own fourth quarter trading update.

Having proved something of a retail Christmas winner and with its shares up 61% in the past 12 months, investors will be hoping the sales momentum will have continued into 2014.

Like-for-like sales growth at the FTSE 250 listed group exceed that achieved by Argos, buoyed 
by the improving UK housing market. Argos should again benefit from growing online sales explains Keith Bowman, equity analyst at Hargreaves Lansdown Stockbrokers. However, he adds: “As 
in the third quarter, both divisions could again report reduced profit margins. Prior to the update, and with the share price up over 30% over the last six months alone, analyst opinion has recently cooled from a ‘cautious buy’ to a ‘hold’.”

Morrison Supermarkets also reports its full year results on Thursday. With its shares off by 8% in the past 12 months coupled with its management having issued a profits warning at its post Christmas trading update, investor expectations are already arguably low. Ahead of the update consensus pre-tax profit for the year is forecast to fall by around 19% to £728m, partly on the back of increasing competition from the so-called 
‘hard discounters’ Lidi and Aldi.

Last week, broker Panmure Gordon, reiterated a ‘sell’ recommendation on the shares, while analysts at Jeffries re-affirmed their ‘buy’ stance.

For his part, Admans, lists the stock as a ‘hold’. He says: “Investors will be looking for some indication that Morrison’s is winning against its low cost rivals in the north of England and its established convenience competitors, as it pushes ahead with its programme to open convenience stores in London. An update on the role out of it online strategy will also be welcomed.”

Bowman adds: “In all, with no thawing in competition expected near to medium term and current management initiatives – the roll out of both convenience stores and an online offering – taking time to become material, analyst opinion currently points towards a ‘weak hold’.”

1 thought on “Mindful Money’s Monday share tips: Prudential, Morrison, Antofagasta and Homebase”

  1. Noo 2 Economics says:

    Been in a Morrisons supermarket lately? DEAD is the word due to their price increase strategy presumably to pay for all the dry ice they use on their display’s these days along with what seems a long time coming internet business

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