UK Stocks and Share tips
Top
of the Tips: Share Recommendations 26/1/2007
Buy
Metalrax
This
Midlands engineering company boasts a broad income base
and unlike many in its sector has continued to grow and
profit over recent years.
Metalrax's
economic fundamentals are pretty sound – market capitalisation
of £80m, debts of just £9m and a hefty 7.7 per
cent dividend yield. Metalrax's recent year-end update confirmed
that the company will meet the final dividend for this year,
and also highlighted the ongoing recovery of its largest
division, engineering support services.
Metalrax
is also looking at ways to maximise value from its freehold
properties and its houseware division, showing promise for
the future. Although at around 14 time forecast earnings
it is not cheap, Metalrax's solid yield still makes it an
attractive purchase.
Augean
Hazardous
waste processor Augean are at the top of their game in the
UK, and benefit from holding a strong position in a market
with a high barrier to entry. Last year, Augean made an
impressive profit of £3.4m on sales of just £26m,
and this trend looks likely to continue this year.
Augean
also look in a healthy position for a takeover, and further
growth in the company's share price seems inevitable.
Buy,
says The Independent.
Sell
DSG
International
The
owners of Dixons, Currys and PC World are not enjoying the
post-Christmas feel good factor experienced by some retailers
– DSG's Currys chain have only managed 1 per cent
growth in sales over last Christmas, and their Italian UniEuro
chain experienced a 7 per cent drop in sales.
Although
DSG have recently been buoyed by strong sales of flat screen
televisions, this sector is coming under pressure from falling
margins, as LCD TV prices are continually falling. Indeed,
the anticipated fall of 17 per cent in flat screen TV prices
in 2007 means that Currys will have to sell 20 per cent
more just to maintain current margins.
Although
there are a few signs of hope, 2007 looks like it will be
a demanding time for DSG, and at more than 14 times earnings,
DSG might have a little further to fall yet.
Sell,
says The Times.
|
