Mindful Money’s Monday share tips: Burberry, Tullow Oil, Experian & Dixons…

13th January 2014


Following a disappointing period which witnessed its shares dive by some 26% over the past year, investors will be keen to hear how Tullow Oil is progressing when it delivers a trading update to the market on Wednesday writes Philip Scott.

There FTSE 100 listed  oil and gas explorer has many more drill tests to come and failure in one region does not impact the probability of success in another asserts Sheridan Admans, investment research manager at retail stockbroker, The Share Centre.

However despite the performance the broker consensus on Digital Look denotes a ‘buy’.

Admans, who also rates the stock a ‘buy’, says: “Investors will seek updates on current programmes along with the latest revenue and production numbers during a period, where oil prices have on the whole moved sideways. Investors should also look out for news on the company potentially farming out more of its productive assets.”

Luxury fashion house Burberry publishes its own interim management statement on Wednesday and investors will await sales results that include those all-important seasonal numbers.

The firm’s shares have firmed by 13% in the past 12 months but have fallen by 7% in the past three and the consensus points to a ‘buy’, a sentiment Admans echoes. He says: “The business has been expanding through new store openings around the world and has been buying up licenses to take more control of the brand to drive up its exclusivity. Investors will therefore expect further updates on these fronts, along with its rapidly growing men accessories division.”

Curry’s and PC World owner Dixons Retail reports its third quarter trading update on Thursday. The past year has seen the FTSE 250 group’s shares soar by 80% with a 7% rise in the last three months.

Management outlook comments accompanying the half-year results provided a degree of caution, noting that “very strong trading this time last year, together with the fact that we have now annualised Comet’s exit makes the second half more challenging.” Keith Bowman, equity analyst at Hargreaves Lansdown Stockbrokers says: “Nonetheless, sales of tablet computers are likely to have proved solid, retailing giant Tesco has reduced its store space selling electrical goods, whilst management continues to cut costs. In all and with the company having recently retreated from underperforming markets such as Italy, analyst opinion prior to the update continues to denote a ‘buy’.”

Argos and Homebase parent, Home Retail Group, also reports its third quarter trading update on Thursday. Argos is likely to report like-for-like or same store sales growth, aided by consumer demand for electrical goods and tablet computers in particular.

The shares of the FSTE 250 listed firm have moved up to the tune of 63% in the last year and by 16% over just three months.

Bowman notes that its management may again highlight increasing online sales, particularly for ‘click and collect’ and those generated by mobile devices. Aided by a more buoyant housing market, the group’s Homebase division is also expected to report increased like-for-like sales.

Bowman says: “With Argos now having reported five consecutive quarters of same store sales expansion and the company expected to benefit from any ongoing UK economic growth, analyst opinion has recently thawed from a ‘sell’ to a ‘cautious buy’.”

On the same day credit-checking operator Experian, up 9% in the last 12 months, delivers a interim management statement. While the consensus points towards a ‘buy’, Admans lists the group as a ‘hold’. The last update lowered analysts’ full year forecasts and investors will be hoping that this is not replicated following this announcement says Admans. He adds: “Areas for investors to focus on will be trading conditions in Latin America, which have been under a little pressure, and updates on its latest US acquisition.”

In Friday’s trading update from betting shop giant William Hill investors will be looking for signs that the unfavourable run of sporting results in mid-to late 2013 which impacted profits is behind the industry says Admans. Over the past year the shares are up 22% but down by 6% over the last three. But just last week brokers at Numis Securities, re-iterated a ‘buy’ recommendation.

Admans says: “We would expect its online and mobile gambling operations to report growth as users are able to access more game options at their convenience, although competition in the online arena remains intense. We currently list William Hill as a ‘buy’.”

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