UK Stocks and Share tips
Top
of the Tips: Share Recommendations 3/12/2006
Buy
Domestic
& General
Insurers
Domestic & General have had a strong year, and their
shares currently look good value trading at 15.5 times forecast
earnings for the year with a minimum 3% dividend on offer.
Although
not a well-known name, D&G make 90% of their revenue
from extended warranties on electrical goods, and have a
near monopoly on this market.
Their
impending promotion to the FTSE 250 is also likely to help
their share price.
Buy,
say The Independent.
Eros
International
Established
for 30 years, Eros International is the distributor of Bollywood
films to the western world, and it listed on the AIM (Alternative
Investment Market) in London in July this year.
Since
then, Eros' share prices have risen by 50% and the first
half of the year witnessed an increase in revenue of 48%.
Eros has also moved into movie production this year –
a highly profitable area, given that 3 billion cinema tickets
were sold in India alone last year.
Despite
the increased share price, Eros' growth potential should
justify further increases, and they currently look cheap
at 15 times forecast earnings for the year.
Buy,
say The Independent.
Sell
London
Stock Exchange (LSE)
Despite
the excitement surrounding NASDAQ's recent attempts to buy
the LSE, its shares look fully-priced at 25 times earnings.
LSE have defied expectations before now, but further increases
seem unlikely without an increase in underlying profits.
It's
probably a good time to take profits for LSE shareholders.
Sell,
say The Times.
Kesa
Electricals
The
owners of Comet have had a strong year, partly as a result
of the logistical troubles experienced by competitors Currys.
However, falling margins and high competition in this sector
leave prospects looking fairly flat, and Kesa's present
share price seems a little inflated at present.
Although
bid hopes and a promised 3.6% dividend should keep the price
up for a while, 18 times earnings seems a little high for
this company.
Sell,
say The Times.
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