Mindful Money’s Monday share tips: Tesco, Greene King & Standard Chartered

2nd December 2013


Pub group Greene King delivers its half-year results on Tuesday and investors will be keen to see if the positive outlook from its last update has endured writes Philip Scott.

The FTSE 250 constituent and owner of popular tipple Old Speckled Hen, has enjoyed a 41% share price rise in the past 12 months and in its trading update for the first four months of the year, it reported increased like-for-like sales, aided by the better summer weather.

Last week brokers Panmure Gordon and Deutsche reiterated respective ‘hold’ and ‘buy’ recommendations on the stock, while Keith Bowman, equity analyst, Hargreaves Lansdown Stockbrokers says ahead of its upcoming announcement, with the dividend yield still relatively attractive, at 2.95%, overall analyst opinion points towards a ‘strong buy’.

He adds: “The group’s expanding food sales remained an important driver, with management highlighting signs of ‘growing consumer confidence’. Given recent updates from rivals, trading for the rest of the first half is expected to have remained solid.

“Again the group’s managed pubs and restaurants division is forecast to have led the way, while its Brewing division may build further on its surprise increase in ale sales over the summer period.”

Wednesday sees supermarket giant Tesco deliver its third quarter update where investors will be looking for a positive update on the group’s operations in China, a increase in Tesco’s Express openings and more information on its move into the pension market says Sheridan Admans, investment research manager at The Share Centre.

The past year has not witnessed any extreme swings in the firm’s share price, falling 6% over three months, rising 7% over a year. But brokers Deutsche and Jeffries have both reiterated ‘buy’ recommendations.

Admans presently lists the stock as a ‘hold’. He says: “We suspect that Tesco is likely to still be feeling the squeeze from German discount brands Aldi and Lidl and upper market competition such as Sainsbury’s and Waitrose in the UK. We also expect good performance from its online and click and collect operations.”

Bowman adds: “Further declines are also forecast overseas which have been hindered by increased discount competition in the case of Ireland.

“Ahead of the announcement and with analysts continuing to give the relatively new chief executive time to execute his turnaround plan, consensus opinion currently denotes a ‘strong hold’.”

Deutsche today reaffirmed its  ‘hold’ stance on emerging market focused bank Standard Chartered, which delivers a trading update on Wednesday. The firm has under-performed so far this year, as concerns have grown over the health of Asian economies notes Admans. Notably its shares have been relatively stagnant, edging down by 1% over the past year.

Admans says: “The group has already lowered its growth targets and investors will be hoping that pressure on revenues is not getting any worse. Comments on currencies and the situation of its South Korean business will also be worth noting. We currently list Standard Chartered as a ‘hold’.”

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