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Panmure Gordon has raised its rating for travel and leisure group TUI Travel from 'sell' to 'hold', saying that there are now few catalysts for the stock to underperform. "The group is outperforming operationally, free cash flow generation is improving and with renewed effort from TUI AG to optimise the corporate structure of the two companies we see few catalysts for the stock to underperform."

While Jefferies has maintained its 'hold' rating for the shares, the broker said that it sees upside risk to its 2,050p target price.

Anglo recorded impairment charges worth $4.6bn in 2012, $4.0bn of which related to its Brazilian Minas-Rio project, which was found to need $8.8bn more in capital expenditure after a detailed cost and schedule review. Jefferies said that while the Minas Rio project still has risks, upside potential to the revised capex budget is minimal. Meanwhile, the broker said that incoming Chief Executive Officer Mark Cutifani would likely look for opportunities to create value at Anglo, "and there is a possibility that the merged Glenstrata attempts to acquire the company at some point."

Jefferies is 'becoming more positive' on Anglo American after the mining giant reported better-than-expected results for 2012 on Friday morning. "While we have been concerned about structural cost pressures in South Africa, operational challenges in most of Anglo's businesses, and the risk of further delays and capex overruns at the company's Minas Rio iron ore project, it is possible that the worst is now over for Anglo American, and we are becoming more positive on Anglo shares." Even including the impact of strikes in South Africa during the second half, the broker said that underlying earnings still beat consensus estimates, helped by better-than-forecast results in iron ore, metallurgical coal and thermal coal. "We believe the market's expectations for Anglo were low coming into earnings, and we expect this morning's results to lead to near-term outperformance for Anglo American shares."

The trading statement from Pennon yesterday confirmed that South West Water was still trading strongly and should outperform the targets set for the current regulatory round, which ends in March 2015. As indeed it should. But while the prices of those recycled materials have seen some recovery from the lows of October and November, they are still running at below the levels seen in the summer. Pennon was cautious about any further recovery, so earnings in the next financial year starting in April will be broadly similar to the current year. This suggests something in the 40m pound area for both years; one analyst was looking for more than �70m for 2014-15, but it looks too early for a proper view. Some analysts had been pencilling in a much sharper recovery next year, so estimates were duly cut. The fall in the price means the yield on the shares, traditionally the lowest in the sector, is now approaching the others, 4.4 per cent for the current year. This gives some support, but there could be more shocks to come. A mere "hold", then, Tempus concludes by saying.

The company has also been hurt by weak sentiment surrounding mining and the unconventional energy market. This is particularly true in terms of the oil sands market, which is expected to be very soft. The shares are trading on a December 2013 earnings multiple of 12.3, falling to 11 and yielding a prospective 3.4%, rising to 3.7%. The shares are now a hold, down from buy, Questor says.

Never lol..........

There was confusion over Aberdeen Asset Management's apparent return to the acquisition trail yesterday morning. The company last bought a business, the asset management side of Royal Bank of Scotland, in 2010, and the chief executive Martin Gilbert was quoted here as recently as September as saying he preferred to use surplus cash to boost the dividend and buy back shares. Almost 130m pounds in total takes a large chunk out of the 300m pounds in the bank at the end of last year, which the market had expected to go back to investors. Except that Artio comes with 136m dollars in cash. The net figure for both, a little more than 40m pounds, is less than Aberdeen's free cash-flow since the start of the year. These are small, infill purchases, not a return to the deal trail. Aberdeen's strong rise since last spring - witness the graph - may count against any further outperformance over the sector as a whole. But the future for fund management looks to be with a handful of strong players, and Aberdeen will be one of them, The Times's Tempus writes.

Energy and mining services group AMEC produced a good set of full-year results yesterday, boosted by an increase in activity in the North Sea. However, the shares fell as investors fretted about prospects for 2013 and the company's margins, which fell to 8% in 2012 from 9.2% in 2011. Ian McHoul, AMEC's chief financial officer, said the lower margins were caused by the company taking on more procurement activity for some of its largest customers. When this effect was stripped out, margins were down by just 60 basis points instead of the headline fall of 120 basis points, Mr McHoul said. As well, AMEC's failure to announce another repurchase programme probably contributed to yesterday's sell-off.

The company's maiden interims in September revealed revenues of £135,000 for the six months to 30 June 2012 compared to £60,000 in the same period of 2011. After taking professional advice the £39 million cap believes there are strong grounds for rebutting the Canadian action and the board intends to defend the company's position vigorously. Whatever the legal ins and outs of the situation may be, the uncertainty cannot help sentiment toward a firm that is not expected to make a profit until 2015 at the earliest, according to consensus........as always dyor and good luck

Sell specialty chemicals market firm Revolymer (REVO) on the news it faces the prospect of lengthy and costly patent infringement proceedings in Canada this year (1 February). Since its 10 July 2012 listing on Aim, Revolymer's share price has already slipped from 103.5p to 66p. But matters could get worse after notification from Canadian firms Fertin Pharma and Gumlink that they have started proceedings against the company on the grounds they believed Revolymer's sales of its nicotine gum in Canada had infringed their patents. Flintshire-based Revolymer's showcase product range comprises of chewing gum which is both more easily removable and bio-degradable.

Job losses at one key customer, French car-maker Peugeot (UG:PA), suggest all will not be plain sailing while a major customer is also running down inventory in the high-volume healthcare business. Nevertheless, these setbacks should be more than offset by the acquisition of WEBTEC by the healthcare unit, while Scapa's Barnier-branded tapes unit continues to make significant new customer wins, with Volkswagen (VOWG:DE), Mercedes and Ericsson (ERIC-B:ST) the latest names to join the roster.

A phenomenal corporate turnaround story has further to run at Scapa (SCPA) as a far-ranging self-help programme means the losses of 2009 and 2010 are fast becoming a distant memory. Interim results in November revealed a 31% rise in profits before tax achieved on a 5% increase in revenues. An ongoing overhaul means Scapa is deliberately reducing its exposure to low-margin, commodity tapes in favour of branded goods and application-specific offerings. After a recovery from 2010's trading deficit to profits of £6.1 million and £10.5 million for the fiscal years to March 2011 and 2012 respectively, the market is looking for further advances to £12.1 million and £12.6 million for this year and next. That still leaves the stock on a price/earnings ratio of barely 12 and a net cash balance sheet may leave scope for a first dividend payment since 2008.

New customer wins in Japan and Taiwan should drive the Optronic arm onward, as should new capacity additions in Taiwan and Korea. December's debt refinancing is another source of comfort, while the 5% increase in the interim dividend to $0.04 looks like a sign of confidence. A forward price/earnings ratio of 15.5 times for 2013 is easily justified by the growth potential. The company reports full-year numbers next week (19 February).

AZ Electronic Materials (AZEM) for its exposure to the burgeoning smart phone and tablet markets. While consumer gadget king Apple (AAPL:NDQ) has seen its growth slow, share price dip and rating contract, AZ Electronic Materials has continued to forge ahead. After floating in November 2010 at 255p the shares have roared ahead to 379.5p, despite what were relatively lukewarm interim numbers (23 August 2012) and a tepid third-quarter update (25 October 2012) when key end markets such as flat panel displays (FPD) showed some order volatility. In addition, AZ Electronics continued to invest heavily in product development, while currency fluctuations also took their toll. On a divisional basis, the IC Materials unit saw a 3% year-on-year decrease in third quarter revenues to $135.4 million as certain customers in the memory sector undertook modest wafer capacity reductions.

Mining giant BHP Billiton (BLT) has seen its share price simply go with the flow along with fellow constituents in the fiscal cliff resolution inspired 2013 relief rally, also supported by data from its number one customer China, which indicated a soft landing for the world’s second largest economy. More Billiton specific news came with January’s two year target of compound annual growth rate of 10% in copper equivalent terms, which has provided enough momentum to drive the share price back towards the best levels of the past year near 2,200p. However, given patchy growth across its major markets, the Finals will need to reassure the markets over levels of demand.

Since the financial crisis began in 2007, B&Q owner Kingfisher (KGF) consistently generated profits and revenues ahead of expectations, and it was only the Great British summer of 2012 that saw the fundamental wheels start to come off. Indeed, until the middle of last year the retailer was one of the few High Street plays to really defy the downturn. Since then, Kingfisher’s emerging markets businesses have again boosted the bottom line, with the company’s Q3 report in November revealing a surge in revenues from new territories such as Russia. If this week’s trading update provides more evidence of the same, the near one-year consolidation for the stock between 270p – 290p could be broken to the upside.

It has been harder than might have been expected for the stock market to forgive and forget aerospace & defence group BAE Systems (BA.) over the failed merger with Airbus owner EADS last October. The subsequent announcement that BAE’s COO is to resign at the end of March has hardly helped either. Some observers are talking about the end of an era for the FTSE 100 giant, even before investors know what the strategy will be for the future. As things stand the only reason to go long of the stock is to chase what was described in the autumn as “modest growth in underlying earnings per share for 2012.” With this in mind, Finals from the company this week will need to be particularly dynamic and full of news such as contract wins - Typhoon aircraft from Saudi Arabia would help.

http://www.investegate.co.uk/sage-group-plc-(sge)/rns/transaction-in-own-shares/201302150700079382X/

http://www.investegate.co.uk/johnson-matthey-plc-(jmat)/rns/jm-enters-new-relationship-with-anglo-platinum/201302150700089433X/