News

BP's current structure dilutes its exposure to the soaring price of oil, according to a recent broker's note. A solution would be to offer investors shares in two separate companies, which could yield about $35bn of hidden value, the Sunday Telegraph writes.

Whether or not BP decides to do something radical, the proposal has focused investors' minds on its valuation. The stock is trading at just 11 times prospective earnings. Coupled with the potential of a $65bn handout to shareholders over the next three years, the shares remain attractive.

Investment trust Impax Environmental Markets invests in small and mid cap growth stocks active in environmental markets around the world. In the three years since its launch the fund has increased in value by 120%. IEM is managed by Impax Asset Management, a wholly-owned subsidiary of Impax Group. The group's share price has tripled since August 2005 but the Telegraph still recommends investing in the IEM trust.

Electrical power component supplier XP Power is well positioned in a niche market. An added attraction is the dividend, which could be 18p this year. The current share price fails to reflect its growth prospects. Buy says the Mail on Sunday.

Personal debt restructuring specialist Invocas has made a strong debut since floating earlier in the month at 111p. But the company is still trading on about 19 times earnings, below its quoted rivals. With interest growing, it seems that Invocas will catch up with the rest of the sector over the weeks and months ahead. Buy says the Telegraph.

The Telegraph reports that US broker Morgan Stanley is keen on Informa, which the broker says remains one of the lowest-rated companies in the professional publishing sector. A price to earnings ratio of 15 times in 2006, dropping to 13.2 times in 2007 and 12.2 is a discount to the professional publishers' average of 17.1 times in 2006. Buy.

Clothes chain Ted Baker announced strong results last week. Its brand is still strong and it continues to manage the difficult balance of retaining niche credibility with fashionistas combined with mass-market appeal. Analysts have upped their price targets to 550p. Buy says the Telegraph.



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