Mindful Money’s Monday share tips: Standard Chartered, Legal & General, Aggreko & Inmarsat

3rd March 2014


Following a number of negative updates investors will be keen hear some positive news when Standard Chartered delivers its full year results on Wednesday writes Philip Scott.

The bank, which derives most of its profits from Asia, Africa and the Middle East, has endured a 30% fall in the value of its shares over the past year and a 12% drop over just the last three months.

The news has been steadily getting worse for Standard Chartered as pressure mounts on emerging markets says Sheridan Admans, investment research manager at The Share Centre, who rates the stock a ‘hold’.

He says: “The group has had to lower its revenue targets and recently announced a management shake-up. Investors will be focusing on regulations, currencies and performance in its main markets.”

Speculation regarding a possible sale of its Hong Kong based consumer finance business, PrimeCredit, is likely to raise analyst questions notes Keith Bowman equity analyst at Hargreaves Lansdown Stockbrokers. He adds: “As with rivals, a sale could both raise capital and signal a strategy towards a more focused bank. Prior to the announcement, analyst opinion points towards a ‘strong hold’.”

Also updating on Wednesday with its fourth quarter results is UK insurer Legal & General, which has enjoyed a 50% jump in the value of its shares over the last 12 months.

Analysts at Bank of America and Deutsche have both reiterated ‘buy’ recommendations on the stock in recent weeks and Admans is also upbeat on its outlook.

He says: “Investors will be looking for a repeat of Legal & General’s third quarter results, demonstrating impressive inflow levels and sales across all its disciplines. Details on its plans to lend to medium sized firms and its outlook for the ensuing financial year, given the strong performance in 2013, will be of interest. An update on its overseas expansion plans will also be worth noting.”

Thursday sees global provider of temperature control and compressed air systems Aggreko, down 8% over the past 12 months, report its full year results.

According to Bowman, Revenues for its Power Projects business are expected to be around 2% lower year over year as some slowing in business across emerging markets was previously highlighted as impacting progress.

He adds: “The group’s December update saw management marginally raising overall group profit expectations. Shareholder returns are also likely to prove a focus. Strong cash generation may underwrite an additional increase in the dividend payment – the interim dividend was raised by 10%. Consensus analyst forecasts currently point towards an 8% rise for the full year.”

Ahead of the release, analyst opinion denotes a ‘hold’, a sentiment which Admans  concurs with. He says: “The share price has been under pressure over the last year on the back of mixed trading updates, growing concerns over the short to medium term outlook and pressure on emerging markets and their currencies. The last trading update showed signs of improvement and investors will be hoping for that trend to have been maintained.”

Thursday sees Inmarsat, the provider of global mobile satellite communications services publish its preliminary results.

With its shares up 7% over the last year, investors will looking for evidence that subscriber uptake has remained strong in the fourth quarter, particularly after the launch of its GX satellite in December and its pricing initiatives.

Admans, who lists the stock as a ‘buy’, says: “Investors will also be keen to see how Inmarsat is dealing with the US defence cut backs and what demand it’s seeing for its new services.”

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