I've previously noted my appreciation of the business credentials of Carolyn McCall. She has not really delivered yet at ITV (ITV) but as I detailed at length at the time of the interim numbers in July I see some value, especially since the shares are now twenty pence lower than back then. The third quarter trading update has three elements to it in my view. The good news is that the company continues to win share of the family viewing/online viewing market and the studios business continues to go from strength to strength – I told you it did not need to spend large sums of money on silly purchases like Endemol. Organic revenue growth of 7% in studios spend was very decent and even though something called Snowpiercer getting pushed back into 2019 will hurt full year studios growth, the pipeline looks great with Love Island US and Sunday Night Takeaway (Australia) primed for launch.
Less good however is the advertising environment which is expected to be 'broadly flat' for the full year despite a 2% rise in the first nine months. Well Bah Humbug for Christmas spend then... More seriously we know advertising spend is generally more compressed but at least it is not falling off a cliff. Finally the nod towards a healthy balance sheet is important. I see Carolyn is going to be reunited in a few months with her old easyJet CFO which no doubt will give her even more confidence about the numbers as she continues to evolve the business towards a creative/online focus. In the meantime that punchy 8p dividend is nice and affordable and equating to a 5.4% yield back here below a 150p share price. Overall, I am still a buyer.
Uh Oh….more bad news for Neil Woodford as Idex releases Q3 numbers. Read Nigel Somerville HERE
Now onto Marks & Spencer (MKS). Back in May, I wrote a piece on the turnaround plan concluding: 'Sub 3 quid a share equates to a bottom drawer call option i.e. buy it at or below this level and I think you have a sporting chance to make some money over (say) the next two or three years. The transformation programme is absolutely the right thing to do and thinking big and radical is the key as it is a really competitive world out there. But it is a bottom drawer stock - only one to blend into your portfolio after you have a holding in those eight or ten much more compelling total return FTSE-100 stocks out there currently'
Amazingly the share price is pretty unchanged since then - and has basically gone in a sideways direction either side of three quid since I wrote the piece. That's classic bottom drawer stock behaviour. What did I think of the half-year numbers? They are the usual combination of lacklustre profits progression, ongoing cost cuts, patchy like-for-likes as store closures and pulling away from promotions occurred, squeezing cash flow with a benefit on net debt levels and the like. At least the core full year expectations were left untouched. We all know the issues - wonderfully captured by the stat in a Sunday press article that noted "a quarter of its (M&S') £4.2bn of lease obligations relate to shops with contracts that have more than 25 years to run" - and it immediately noted on the conference call that they are deep in 'restoring the basics'.
Will the fat lady soon be singing for Mowana - Cradle Arc looks screwed says Gary Newman HERE
The share price reflects that we all know the key structural issues here and the 6%+ dividend yield (currently covered by free cash flow) and x11 forward P/E says this. My view remains the same as back in May. This is a bottom drawer turnaround situation to have as a bit of a large cap punt after you have put together a bunch of other more prudent/sensible large cap plays. Online progress from a low base is fine, resonance with consumers is slowly rebuilding, it is finally embracing AI in-store and - more generally – it is a well-known name with (now) what appears a much better team and a big awareness things have got to change. The plan is 'three to five years to make M&S great again'. Given these attributes and a balance sheet which - unlike some other embattled sector peers - gives them half a chance, I would buy/hold some here below 300p a share in anticipation of some 2019-20 share price appreciation payoffs. In the meantime there is the dividend flow...and the fine range of lunchtime sandwiches 'natch too.
Burberry - moving further away from those chavtastic days. Read more from Chris Bailey HERE
Filed under: ITV, Marks & Spencer, Bearcast, Gary Lineker, Quindell, Idex, Superdry, Cradle Arc, Burberry
RISK WARNING & DISCLAIMER - FiveFreeShareTips.com tips are provided by independent authors via a common carrier platform and do not represent the opinions of FiveFreeShareTips.com. FiveFreeShareTips.com does not accept responsibility for or make any warranties in connection with or recommend that you or any third party rely on such information. The information available at FiveFreeShareTips.com and via emails you receive from [email protected] are for your general information and use and are not intended to address your particular requirements. In particular, the information does not constitute any form of advice or recommendation by the tipsters or FiveFreeShareTips.com and is not intended to be relied upon by users in making (or refraining from making) any investment decisions. Trading shares involves the risk of loss. The tipsters and FiveFreeShareTips.com shall not be liable for any losses or other damages incurred. The value of investments can go up or down and the past is not necessarily a guide of future performance.
Well actually it will be six. One every week day and one on Sunday, each landing with you at 11 AM sharp.
Unlike other services (which may always have a vested interest) we pride ourselves on our impartiality and cover all small caps including AIM. the Standard List, The Wider Main Market and NEX.
We cover small caps, penny shares, FTSE 350 stocks and blue chips. We look for red hot penny shares, Warren Buffett style value investments with yield and growth stocks. There is no technical analysis in our work just solid fundamental analysis from a team of experts with decades of stockmarket experience.
You will not agree with all we publish but if you are interested in small caps you cannot afford to ignore it either. Yo'll never be charged for the free share tips from Five Free Share Tips and given the star writers involved you know that they will move share prices.
There's no telephone number or postal address required and there is no charge, ever, for your Five Free Share Tips membership. Just free shares tips every day apart from Saturday And each day's share tip will not just be a few thoughts cobbled together but will be detailed analysis from experts.
Our experts do not just earn their living from writing. All own shares. If they own shares in a stock they cover they will declare it and will not sell until after advising a sell to our readers. And why not our tips are so good that why shouldn't our readers put their money where their mouth is?
Don't just take our word for it! Judge us on the calibre of our free share tips and join today to start receiving them from September 1 2017. If you don't like what you get delivered to your inbox unsubscribe and you will never hear from us again. So why not give it a go? Sign Up Now
We've put together a panel of top tipsters, including:
Tom Winnifrith, in his 27th year writing about shares, noted fraudbuster & dubbed "The maverick Tipster"
Chris Bailey, City whizz kid turned financial guru, rated as one of the top 50 commentators on shares on twitter, founder of Financial Orbit
Steve Moore, has worked with Tom Winnifrith for all bar 3 weeks of his working life - a noted commentator on value stocks
Malcolm Stacey, The Grandfather of Share Blogging, the founder of ShareCrazy & a best selling autthor of stockmarket books
Lucian Miers, the Bard of the Boleyn, one of the UK's best known short sellers
Gary Newman, writes about value investing on AIM, speciality is in share tips on oil and mining companies
Nigel Somerville, The Deputy Sheriff of AIM, an expert in forensic analysis a skill used to bust frauds but also to tip true value investments
The team from HotStockRockets, specialising in AIM and small cap shares which will fly on a three month view
Remember to book your place at the UK Investor Show 2018. The UK’s top investment show taking place on Saturday 21 April 2018 at the Queen Elizabeth II Conference Centre in Westminster, London. The show will feature a unique line-up of top speakers including Nigel Wray, tech queen Vin Murria, Dave Lenigas, Mark Slater, Tom Winnifrith, Adam Reynolds, Ed, Croft, Nick Leslau Luke Johnson and Dr Johnny Hon as well as 135 exhibiting small cap companies.
The hot share tips given here are of necessity, general. They cannot relate to the individual circumstances of investors. Anyone considering following the share tips contained here should seek independent advice from a Financial Conduct Authority authorised Stockbroker or Financial Adviser. We cannot be held liable if individuals suffer losses through following share tips contained on this site or emailed out as free share tips. The value of investments can go down as well as up. The past is not necessarily a guide to future performance. Investing in shares can lose you part or all of your capital although the potential returns are theoretically unlimited. The difference between the buy share price and the sell share price for smaller company shares (penny shares) can be significant. Profits from dealing in shares may be liable to tax - the level of tax and bases of relief from tax are subject to change. Changes in the rates of exchange may have an adverse effect on the value or price of an investment in sterling terms if it is denominated in a foreign currency. Some of the shares recommended on this site will be smaller company shares. By their nature such investments can be relatively illiquid and thus hard to trade. And that makes such investments more of a high risk than larger company shares (or 'small caps'/'penny shares'). FiveFreeShareTips.com & its sister site ShareProphets.com defines a smaller company share as any stock traded on AIM or NEX or which has a market capitalisation of less than £300 million.