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Sunday share tips: Tesco, Next, Ideagen

Mon, 17th Mar 2014 07:01

Sell shares of Tesco, the Sunday Telegraph's Questor column advised. Britain's biggest retailer's market share is large at 28.7% but it is falling. Tesco has not yet cut prices in its attempts to revive its fortunes. WM Morrison has promised to cut prices and Tesco could follow but, along with planned store refurbishments, price cuts would reduce earnings cover and increase questions about Tesco's dividend. Tesco shares have fallen 15% since Questor said to sell them in early October. With no change in the basic questions facing Tesco, the advice stands.Don't expect big returns if you invest in Next shares, Danny Fortson argued in the Sunday Times. In his Inside the City column, Fortson said Next's market value of £10bn, boosted by share buybacks, looked "a bit toppy". Next succeeds while rivals such as Debenhams flounder because it has good products and services, particularly online. It is also highly profitable with margins of almost 19%. Opening bigger stores gives more room for newer lines such as home and garden. This is all good stuff but the shares are for those "happy with a more modest increase in underlying value".Buy shares of Aim-listed Ideagen and watch them grow, the Mail on Sunday's Midas column said. Hospitals and GP surgeries need to go digital, and individual health trusts are buying their own IT instead of the Government attempting to centralise systems. Ideagen's products let trusts and GPs get to their patients' records easily. The company is expected to unveil two new contracts soon. In the year to April 2013 revenue was £6.5m and profit was £1.9m. Chief Executive David Hornsby aims to supply half England's 200 NHS trusts, creating turnover of up to £50m. Supporters of Ideagen think the shares will triple to £1 over the next few years.Shareholders should stick with shares of small-cap van hire group Northgate, Questor said in the Sunday Telegraph. Since Questor tipped the shares on December 4th they have gained 24% and last week's trading statement showed the business doing well. Northgate's fortunes are strongly linked to the UK and Spanish economies. After a restructuring, the company is targeting the booming London market and the UK van fleet is up 9% on a year ago. Spanish trading has been tough but vehicle falls have stabilised. The shares' forecast price-earnings ratio of 14.9 is about right.Steer well clear of PV Crystalox Solar, Danny Fortson warned in the Sunday Times. Things have got worse since the solar panel maker appeared in Fortson's Inside the City column 18 months ago. PV's problem was a flood of cheapo panels from China that forced other European solar companies to go bust. The European Union has stepped in to deter Chinese dumping of cheap panels but governments are slashing solar subsidies anyway. Fortson questions how long the company can survive. There is an opportunity to profit from the difference between PV's market value and its wind-up value but the company has not communicated clearly enough.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.SF
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