The Week In Review: Smarter investors stay away
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.Will someone please take Alliance & Leicester over, if only to put an end to speculation that has become almost as predictable as the group's results.
The UK's seventh biggest bank has unveiled a tidy profit of £548m, up from £540m a year ago, and managed to increase the dividend a creditable 7 per cent, to 51.5p. But as far as the shares go, there seems little there to attract the smarter investor.
The bid gossip surrounding Alliance & Leicester has been around for ever. Management pretends to find it an irritation, but in reality it keeps the shares higher than they otherwise would be.
The City is getting tired of waiting for the takeover bid that never comes, and the shares look overpriced at almost 14 times forecast earnings. Sell.
HARDMAN
The Chinguetti field off the shores of Mauritania has started to produce oil for the first time. This takes the group from being one of more than 100 resource explorers listed on the junior market to membership of the select club that actually produces oil. For any investor keen on exposure to oil exploration and production, Hardman should be a core holding.
ROBERT WALTERS
This looks set to be another great year for recruitment group Robert Walters. The full-year figures saw the company register a 57 per cent rise in pre-tax profits to £12.7m and a 12 per cent rise in the dividend, to 3.4p per share. By the end of the current year, analysts expect Robert Walters' profits to hit £15m. Buy.
HAYS
The deregulation of Continental Europe's jobs arena is a great opportunity for recruiters and Hays is taking advantage. It has delivered a 40 per cent jump in the fees it earns from overseas operations. Last year it bought back £312m worth of its own shares. At 16 times forecast earnings for 2006, the stock is at a slight premium to the UK market but in line with peers. Hold.
HENDERSON
Having disposed of both its closed life insurance book and UK financial advisory arm last year, Henderson's transformation into an uncomplicated fund manager is done. But what's next? A bid for rival Gartmore is fraught with problems, and medium-sized firms that have tried to be all things to all people in the past have not got far. Take profits.
TAYLOR WOODROW
If it was not for the performance of its US house building division the latest annual results from Taylor Woodrow would have been dire. Britain's third-biggest house builder managed a 2 per cent rise in pre-tax profits to £411m thanks to a whopping 56 per cent jump in profits at its US operations. But now clouds are gathering for the company across the Atlantic, avoid.
DEVRO
Full-year profits from the food-casings maker Devro came in slightly below expectations. To blame was the fact the company had one fewer trading week in December. Still pre-tax profits rose to £25m from £18m previously. The shares trade at 14 times forecast earnings and are fairly priced.
STANDARD CHARTERED
Standard Chartered, makes over three-quarters of its earnings from Asia, has unveiled bumper profits for 2005 and a stiff hike in its dividend. At almost $2.7bn (£1.5bn), pre-tax profits rose 19 per cent last year after the £3.3bn purchase of Korea's SC First Bank began to pay off. Buy.
ALIZYME
Alizyme shares are up nearly 50 per cent and were up again this week following positive trial data from the biotech's ATL104 treatment for Mucositis. ATL104 is not even Alizyme's most exciting product. Cetilistat, an anti-obesity formula, is widely talked of as a likely blockbuster. It also has a further two products on the way. While there is no guarantee that any of these drugs will actually make it, Alizyme should be a core holding for biotech bulls.
SHL GROUP
SHL Group is a world leader in psychometric testing. These are increasing used in the recruitment process of large companies so it is no surprise that SHL has unveiled solid results. Buy the shares.
ARENA LEISURE
Having spent many years disappointing the City, Arena Leisure has finally started to deliver for shareholders. Annual results from the racecourse owner revealed a 30 per cent jump in operating profits to £6.7m and a 10 per cent rise in sales. This is not a stock that is going to double overnight but should prove a good bet for long-term investors.
Logica is in the right place to cash in on global outsourcing
LogicaCMG has unveiled a 66 per cent rise in annual profits, thanks to the continued recovery in the IT services market last year.
The group, which provides IT services to business customers, has a great opportunity to outperform. Over the past year it has rapidly grown its ability to provide services from low-cost offshore centres such as its facility in Bangalore.
This should help it cash in on the growing trend among corporates to outsource their IT needs.
At 18 times forward earnings the shares are not expensive, but risk factors make Logica just a hold for now.
The above are recommendations taken from the daily Investment Column.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments