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Sunday share tips: Vedanta, Highland Gold, Barratt

Sun, 08th Sep 2013 20:13

The Telegraph's Questor column said buy Vedanta. The natural resources group has completed a restructure that could bring $200m of tax savings. Analysts at Liberum Capital also think the fall in the value of the Indian rupee could boost EBITDA by $455m if the decline persists to the end of the year. Commodity prices are recovering as Chinese growth bounces back and increased oil prices resulting from Syria tensions could also boost profits. Vedanta has debts hanging over it but if that clears the shares will rise sharply, Questor said.Investors with appetite for risk may want to follow Highland Gold Chairman Eugene Shvidler in buying the gold miner's shares, the Mail on Sunday's Midas column said. Midas said Shvidler bought shares at 50p and 60p in June and they are now at 77.75p. Uncertainty hangs over the gold price but Highland's costs are lower than those of many peers and the company made $153?million (£102?million) last year. It also paid a 7.8p dividend and a similar payment this year would give Highland a 10 per cent yield. Barratt Developments is back in good health, the Sunday Times's Danny Fortson wrote. The shares have risen by a third since its £720m rights issue in 2010. Analysts expect the first dividend for five years and annual pre-tax profits up 70% to £188m when Barratt reports on September 11th. An early interest rate rise is a risk but Barratt has only £30m of debt. Barratt is also more evenly spread than rivals tied to London. The shares trade at a third of their pre-crisis high and Jefferies, the broker, thinks they will rise 40%. Barratt is better placed than most to ride the reviving property market, Fortson's Inside the City column concluded.Melrose Industries is a good stock for the more sophisticated investor, Midas said. The shares have risen almost 50% since January and Executive Chairman Christopher Miller spent £6.6m on them. The group, which buys, overhauls and sells ailing businesses, reported a doubling of pre-tax interim profits on August 29th to £139?m for the six months to August. Miller was upbeat, the company is well run and it has fulfilled its promises consistently. Patient investors may want to buy Premier Oil shares after oil veteran Michel Romieu paid £5.9m for the company's stock, Midas said. It was his first purchase of Premier since joining the board in 2008. Premier had a reputation for disappointing shareholders but it now has wells in production, assets in development and some early exploration success. Romieu knows the industry well so his timing should be noted.Now could be a good time to buy Ryanair, Danny Fortson wrote in the Sunday Times. The budget airline warned on profits last week and said it could miss the low end of its previous guidance of €570m to €600m. Boss Michael O'Leary blamed increased competition, European economic gloom and the weak pound. The news sent Ryanair shares down 14% but rival easyJet reported strong August passenger figures the next day. O'Leary has a long history of managing expectations downwards and investors might want to take advantage of the shares' fall.The Mail on Sunday's Midas column said it might be wise to steer clear of Moneysupermarket for now after founder Simon Nixon made £11m from selling stock in June at 200p. The price has sagged to 174.75p since then and are only just above its 2007 flotation price.Ray Kelvin, Chief Executive at fashion chain Ted Baker, made about £20m from selling shares for "personal reasons" at 1,948p, Midas said. They are now at 1,948p and Kelvin still owns more than 15 million shares in the company he founded. A recent trading statement was extremely upbeat but the current price looks quite high. However, investors may want to follow Kelvin's move and buy if the shares dip in the short run.Follow SuperGroup co-founder and Design Director James Holder and sell a chunk of a stake in SuperGroup, Midas advised. Holder sold two million shares at 1011p in July to help finance a divorce but still has more than nine million. Shareholders who bought at flotation should follow his lead and sell some shares, which have climbed to 1,197p - more than double the 2010 IPO price of 500p.Geoff Thompson made £11m by selling stock in Utilitywise, the energy consultancy he founded, in the last quarter Midas said. Thompson sold at 100p and the shares are now 141p. Thompson keeps a big stake and sold mainly because big investors said he owned too many shares. The outlook remains positive so sell some but hold on to at least 60%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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