Mindful Money’s Monday share tips

23rd September 2013


The FTSE 100 listed Carnival, Compass and Icap are among those reporting to the market this week, we look at what the brokers are currently recommending, writes Philip Scott.

Tuesday sees the arrival of Carnival’s third quarter results. The cruise operator with a portfolio of brands in North America, Europe and Australia has been engulfed by sinkings, fires and robberies over recent years and coupled with tough global economic conditions it has led to the group offering cabins at low prices. Its shares are up by 5% over the past year but recently they have enjoyed a small boost rising by 8% over the past three months.

Sheridan Admans, investment research manager at stockbroker, The Share Centre, who rates the shares as a ‘hold’, says: “Investors will be looking for a confidence boost from these results.”

Thursday sees Compass Group publish its full year trading update. Presently it is one of the world’s largest contract caterers operating in around 60 countries. Over the past 12 months it has enjoyed a share price rally of 21% and in the last three months it has risen by 4%.

Alterations to the firm’s geographical generation of sales could provide investor interest. Whilst both the group’s North American and emerging markets divisions are again expected to lead growth over the year, some slowing in the latter region may have been seen in the fourth quarter, although a possible pick up for its European and Japanese divisions could have provided some compensation.

Keith Bowman equity analyst at Hargreaves Lansdown Stockbrokers says: “At the one year anniversary of measures announced to address challenging European conditions, a progress update may be forthcoming, while management’s drive to increase efficiency through its MAP (Management and Performance) programme is again likely to feature.

“Prior to the announcement and with the group still seen as offering an attractive combination of defensive growth characteristics, analyst opinion continues to denote a ‘buy’.”

The aggregate consensus on share data hub, Digital Look also has sentiment pointing to a ‘buy’ but for his part Admans rates the stock a ‘hold’. He says: “Evidence that continued strong growth from its U.S and emerging markets operations are continuing to support the slowdown in those regions will also be sought after. In its third quarter results Compass’ CEO was predicting slightly weaker fourth quater sales and full year organic growth to be between 4% and 4.5%.”

Another ‘hold’ for Admans and Digital Look is Icap, which reports its second quarter results on Friday. The past year has seen the shares of the global wholesale broking business firm strengthen by 15%, while it has enjoyed a 19% run over six months. Tighter regulation of the financial services industry has been an issue for the company, a topic which will undoubtedly arise in its update.

Admans says: “There may be more comment on regulatory issues in these results, which the group has been embroiled in. Investors will be hoping to see a continuation of recent revenue growth and clarification on the benefits of its cost cutting programme. Icap’s view on the outlook for financial markets will also be worth noting.”

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