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Sunday share tips: Thomas Cook, Mitchells and Butlers, Lloyds

Sun, 19th May 2013 17:30

Thomas Cook still has a long flight ahead of it, but the new Captain at the controls seems to have stabilised the craft. In fact, things now look normal. Above all, the company needs to sharply improve the experience of its customers, quite a challenge. However, the 1.6bn pound capital restructuring announced last week means that the outfit now has a fighting chance. Then there are the upwardly revised cost-savings targets and plans to rationalise its airlines and dealings with hotels. The travel tour operator may be headed for a sunnier future, says The Sunday Times´s Matthew Goodman. No news is good news seems to best describe the situation at pub operator Mitchells and Butlers (M&B). Investors are now no longer being submitted to a near constant bombardment of negative headlines about the group. In that same vein, this Thursday´s interim results are not expected to bring any surprises, although Morgan Stanley expects them to be respectable enough, with a 12% rise in pre-tax profits. Investors, however, will be watching for any hints regarding the three big uncertainties which now hang over the shares: the size of its pensions deficit, the date and size of its return to a dividend pay-out and whether or not Joe Lewis - one of its main shareholders - will indeed choose to divest part of his stake in the company, Goodman writes. Lloyds shares´ 130% rise in the last twelve months has taken them over the Treasury´s minimum "break-even" price for a sale of its 39% stake of 61.2p. Hence, it is quite possible we will see a large slug of the shares potentially on the block before the end of the year and possibly within the next couple of months, The Sunday Telegraph´s Questor team says. However, if the lender does meet its Chief Executive´s expectation that it will 'obviously' be a high dividend-paying stock in the future then it seems reasonable to hold on to the shares despite the potential 'overhang' of the government´s holdings, Questor adds.Is there further mileage left in the stock or should you bail-out now? That is the question which investors in house builder Galliford Try are faced with, writes The Financial Mail on Sunday´s Midas column. Certainly, Chief Executive Greg Fitzgerald was both bold and canny, back in 2009, when he decided to buy land when prices were dirt cheap. Yet that strategy remains in place and brokers see profits rising to over £80m next year. Further, it is a well-managed business with a focus on the South East. Shareholders who have doubled their money may be tempted to sell about 25% of their stock to bank some cash, but they should retain the rest. However, "new investors could even take a punt if the shares dip slightly over the next couple of months," Midas says. 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.AB

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