News

Lloyds TSB was one of the few banks in the UK that seemed to be holding its own. But Daniels has taken a gamble and in the short-term, investors may feel as if they are losing out. Theoretically, the bank is getting a bargain, buying HBOS while on its knees. Investors should hold on to their stock, keep a close eye on proceedings and remember that the best sort of share portfolio is a diversified one, says the Mail on Sunday.

There is no question that the consumer environment is appalling at the moment, but Kingfisher appears to be holding its own. It has improved its margins and will emerge from the downturn in good shape. At 12 times forecast earnings for 2009, falling to 11.5 times for 2010, the company trades on a higher multiple than rival retailers. Yet this ignores the fact that the group owns property with a book value of £3.26bn, not much lower than its market capitalisation. Plus, there is a decent prospective dividend yield of 4.1 per cent, with the forecast dividend more than twice covered by forecast earnings per share. Buy, says the Sunday Telegraph.

HBOS shares are worth a fraction of what they were a year ago, but at least the Lloyds deal has saved the bank from the brink of collapse. Investors should thank the authorities for their intervention, hold on to their shares and pray that the next few months are a lot better than the last few, says the Mail on Sunday.

Chemring shares are not cheap versus those of its rivals. However, the company deserves to trade at a premium, not least because of its strong record on cash generation, operating margins and (likely) earnings growth. Moreover, the balance sheet is stronger after a recent fundraising. Sit tight, says the Sunday Telegraph.

GTE is expected to make annual taxable profits of about £1m in the current year, but it is operating in a $10bn market and is growing fast. Of course, there are bigger risks when you invest in a minnow such as GTE, but the potential upside is greater, too. If you can afford to take such a risk, get on board now, says the Sunday Telegraph.

Please note: Digital Look provides a round-up of news, tips and information that is impacting share prices and the market. Digital Look cannot take any responsibility for information provided by third parties. This is for your general information only as not intended to be relied upon by users in making an investment decision or any other decision. Please obtain a copy of the relevant publication and carry out your own research before considering acting on any of this information.