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Sunday share tips: Mitie, UK Mail, Vodafone

Sun, 18th Jan 2015 18:44

Mitie's shares have fallen but not as fast as those of outsourcing rivals such as Serco and Balfour Beatty, Danny Fortson pointed out in the Sunday Times. Matthew Earl, a former City analyst who writes a blog, criticised Mitie for buying companies to compensate for its own slow progress and for the way it recognises revenue. Mitie rejects Earl's analysis but he has highlighted concern about the way the sector accounts for "adjusted" operating profit. The City is increasingly willing to listen to lone critics but most investors believe Mitie is a well-run company, the Inside the City columnist concluded.Buy shares of UK Mail, Questor recommended in the Sunday Telegraph. The delivery company has posted record parcel volumes over Christmas, helped by the collapse of rival City Link. The shares fell last year after Amazon launched its own delivery service but they could now be at a turning point. The company is on track to meet annual profit forecasts of £22.5m and the shares trade at 15 times forecast earnings. Questor upgraded its recommendation to buy.Midas's "dogs of the Footsie" portfolio, which picks the 10 highest yielding shares in the FTSE 100, has fared better than the wider index in the past six months, the tipster wrote in the Mail on Sunday. Shares selected six months ago have risen 1.6% compared with a 2.94% fall in the FTSE 100. Vodafone, Imperial Tobacco and National Grid have risen and have dropped out of the portfolio along with Friends Life, which has agreed to be bought. In come BP, Shell, BHP Billiton and Standard Chartered. The other members remain Morrisons, Admiral, Centrica, SSE, GlaxoSmithKline and HSBC. Midas said there were questions about many of the companies' dividends but that the experimental portfolio had held up well.Stick with shares of Shire, Questor advised in the Sunday Telegraph. The drug maker has announced the $5.2bn acquisition of US biotech company NPS and the deal will bring two promising drugs: Gattex, which has been approved in the US, and Natpara, which has not yet gained approval. Failure to get the OK for Natpara would be a setback but analysts expect success when the regulator rules in January. Combined sales of the two treatments could hit $500m and Shire's boss thinks he can outsell rivals. The shares are not cheap but investors should hold on, Questor concluded.

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