Thursday tips round-up: Shaftesbury, Cineworld, Christmas shares

The Tempus column in The Times ponders which stocks would fit into a share portfolio consisting of stocks exposed to London and the South East only, and suggests that one would be Shaftesbury, the property company whose assets consist almost entirely of shops, restaurants and bars in the West End. Its full-year figures yesterday contained one startling table. Over the past five years, gross income from its property portfolio rose year on year through the recession, up another 13 per cent to £77.5 million. Their estimated rental value showed a slight dip in 2009, but that rising income suggests tenants merely continued to pay over the odds. The shares are unusual in selling at a premium to net assets of 8 per cent above the 463p a share at the end of September, up 11.8 per cent over the year. Still a long-term hold for those who believe the London economy will continue to outperform, reckons Tempus.Shaftesbury focuses on London's theatreland in the West End district, which is also where the highest density of cinemas are. That may have prompted Tempus to also mull over the prospects for cinema chain owner Cineworld and this year's blockbuster films. Critics hated it, notes The Times's Tempus column, but the latest film in the Twilight saga should ensure that the strong rise in cinema box office admissions, up 5.2 per cent in October, will continue into November, a note from Collins Stewart points out. This is good news for Cineworld, which has a quarter of the UK market. Tempus suspects that, as in previous downturns, a visit to the cinema will be one of the few little luxuries consumers will not be prepared to give up.RPC is Europe's leading supplier of rigid plastic packaging, with operations in 18 countries, and Garry White, writing as Questor in the Daily Telegraph, reckons you should buy the shares for future growth. Yesterday's interim numbers were strong, Questor maintains. One good measure of RPC's performance is return on capital employed (ROCE), a measure of the efficiency and profitability of a company's investments. In the first half of this year ROCE came in at 18.1pc compared with 15.1pc in the last full year. RPC is looking to improve this measure to 20pc by 2014. Some of RPC's markets are obviously hit by the recession - tighter household budgets mean there are fewer paint pots being sold, and fewer office workers means fewer plastic cups. However, once the recovery starts - whenever that is - the company has a lot of "operational gearing" so profits should rise higher than revenues when volumes start to pick up.The Daily Telegraph has noticed that Christmas is coming, and has chosen five Christmas retail shares to buy, and five to avoid. Carphone Warehouse, Asos, Next, WH Smith and US online behemoth Amazon should all rake in the shekels over Christmas, but the likes of Dixons, Home Retail (owners of Argos and Homebase), Carpetright, GAME, French Connection and Marks & Spencer are best left under the Christmas tree, the Telegraph suggests. Elsewhere in the Telegraph, Questor says diamond miner Gem Diamonds is a stock worth holding on to if you are already an investor. Yesterday, Gem revealed that it had approved the expansion of its 70pc-owned Letseng mine in Lesotho - a move that could potentially double diamond output to about 200,000 carats a year by 2014. The total cost for doing this will be about $280m (£177m) and it will be funded out of the company's cash flow. Obviously, a sustained slump in diamond prices could put the funding at risk. Meanwhile, there could be a bit of bid interest to spice things up. Graff Diamonds is believed to be in the process of preparing a flotation in Hong Kong, and the money raised could be used to snap up Gem as a way of "vertically integrating" the business. Trading on a current year earnings multiple of 9.1, falling to just 7.7 next year, the shares remain a hold until diamond prices stabilise, Questor reckons.--jh