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Sunday shares tips: The Restaurant Group, Shell, Somero Enterprises

Sun, 17th Jan 2016 14:28

(ShareCast News) - Shares in The Restaurant Group are a good bargain again, said the Sunday Times' Inside the City column. The owner of Frankie & Benny's, Chiquito, Coast to Coast and Giraffe lost 18% of its value in one day last week when it revealed a modest slowdown in sales and took a cautious line on the year ahead, yet still stated confidence in full-year profit growth of at least 10%. The stock, at its lowest level for two years, after climbing more than 125% over the last five and serving up growing dividends each year, providing it with a premium valuation - which has now been wiped away. The sales dip was blamed on factors including UK flooding and the Paris terror attacks, while uncertainty ahead remains over George Osborne's national living wage and the referendum on EU membership. Although many analysts slashed their estimates, the company looks good value again, with solid fundamentals of low gearings, a healthy openings pipeline, stable margins and stable management.Royal Dutch Shell shares are worth holding, wrote Questor in the Sunday Telegraph before voting ends in less than two weeks on the proposed takeover of BG Group. The Shell shareholder meeting will take place in the Netherlands on 27 January, with all votes due by 25 January and a simple majority of 50%-plus-one vote needed for the deal, which is a mix of roughly 40% cash and 60% Shell shares to value BG at around £36bn. Shell shareholders will see their holding diluted from 100% to around 81% in the new company, with BG shareholders holding 19%, but management have pledged to keep the dividend at least of $1.88 per share this year and next.Shell is still keen on the deal as it spies savings of around $3.5bn a year by 2018, with $30bn of asset sales and $7bn of cost cutting, $8bn in investment. The Anglo-Dutch giant's oil and gas reserves need a boost to ensure the dividend lives on, with BG's addition increasing reserves by around a quarter from its Brazilian, Egyptian and Australian assets. But the deal only breaks even if oil recovers to above $60 per barrel. Midas in the Mail on Sunday said Somero Enterprises, the small cap construction group, is a share to buy. Somero's is the world's leading maker of machines that ensure concrete floors are perfectly flat, important in most modern buildings and absolutely crucial in warehouses and large commercial buildings or appartment blocks. Almost two thirds of its sales come from America, though the Florida-based company has operations in more than 90 countries. Floating on AIM in 2006 at 125, its shares sank more than tenfold due to the financial crisis.Plans to double revenue to $90m by 2018 are progressing, with a plan to increase take-up of its machines in China one of the recent strands of this strategy. The company's customers are construction subconractors that specialise in concrete floors, with which it has long-term relationships. Somero provides training and guidance to clients, with a team of in-house engineers. Many customers like to buy equipment new, which ranges from £20,000 up to £250,000, selling back old models that are then resold to developing markets. Annual volumes are in the mid-400s, with the aim to get this to 600 in 2018. 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.
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25 Jan 2022 21:13

UPDATE 1-U.S. awards 13 mln barrel exchange of crude from strategic reserve

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25 Jan 2022 20:10

U.S. awards exchange of 13 mln barrels of crude from strategic reserve

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