Member Info for jange

African Barrick Gold: Investec lowers its target price from 526p to 405p, while upgrading from hold to buy.

ARM Holdings: Morgan Stanley raises its target price from 725p to 911p, while downgrading to equal-weight. Investec ups target price from 800p to 900p and downgrades from buy to hold.

WANdisco’s trading update confirmed that momentum continued into Q4, both in terms of commercial progress with the Subversion application lifecycle management business and in hitting development milestones in big data, where the first product launches are now anticipated in Q1. WANdisco is a distributed computing company. It has applied its proprietary replication technology to open-source tools to claim a strong position in the software version control market. It is now targeting the big data infrastructure market.

British Land's shares performed well last year, rising about 20 per cent. They are not the value proposition they were after November's first-half results, when we shifted them to a buy. Yet with an investment horizon of three years or so investors should at least preserve the real value of their capital and earn a useful income.

Yet the company's portfolio has proved resilient. With an occupancy rate of 98.3 per cent, its UK rents held their value everywhere during the six months to 30 September except in shopping centres. True, valuations plummeted on the continent, but British Land only has £247m invested there. Overall, the portfolio was flat, with a 1.4 per cent decline in the retail portfolio offset by gains on its London office developments. These gains should continue. Michael Burt at broker Espirito Santo reckons the development pipeline will add 23p to net asset value over the next three years. British Land's biggest schemes are at Regent's Place, where it is building a new headquarters for Debenhams; the so-called Cheesegrater skyscraper in the City; and 5 Broadgate, where it is redeveloping a site for UBS. Crucially, over half the pipeline is already pre-let to blue-chip tenants.

One problem is chief executive Chris Grigg's failure to communicate a strategy. If he has been gearing up the company to take advantage of rock-bottom interest rates, as is entirely justifiable, he has never said so. Last year's mess over Meadowhall - the company was reported to be selling half its 50 per cent stake in the Sheffield shopping centre, only to announce a new 50:50 joint venture a few months later - smacked of indecision. At the November results, Mr Grigg merely said he was comfortable with the current debt level, but now he is rumoured to be selling the City tower at Ropemaker Place. One reason investors fear debt is that it magnifies capital losses when property values are falling. This is a particular concern for British Land because roughly 60 per cent of its portfolio is invested in the retail sector, where values have been dropping for well over a year.

There's an irony here. For much of 2012 British Land's shares underperformed those of Land Securities and Hammerson (HMSO), its other close peer, probably because of its higher debt levels. Yet the debt markets have been wide open to large, asset-backed companies so, by gearing up to make acquisitions, British Land has, counter-intuitively, reduced its average interest costs. Equity investors seemed to recognise this after the company's solid half-year results in November sparked a re-rating. Now British Land's shares trade at just 2 per cent below net asset value, roughly in line with Land Securities. But they have not returned to their traditional peer-group premium - as arguably they should in light of the company's superior profitability.

British Land (BLND) is perhaps best known for having pieced together Broadgate, the vast office complex next to London's Liverpool Street Station. The entrepreneurial brilliance of that and other achievements under long-time chairman Sir John Ritblat earned the company's shares a permanent premium rating to peers. Its star has faded since Sir John retired in 2006. Yet the company's portfolio is still widely acknowledged to be the best in the industry, and British Land is the most profitable of the big reits. If you need a low-risk place to park capital for three years or so while collecting a reasonable income, British Land's shares fit the bill. Most of the return will come from dividend income. This is where British Land stands out - it pays a conspicuously higher share of its book value in dividends than its rivals. That's mainly because of clever debt management. After a number of financing deals over the past 18 months, British Land pays an average interest rate of just 4.4 per cent on its £4.79bn debt - half a percentage point below the rental yield of its portfolio, net of operating and administration costs. This means British Land's debts do not just magnify the capital returns from its portfolio - they also boost recurring profits. Contrast that with arch-rival Land Securities (LAND), whose debt, costing 5.1 per cent on average, dilutes its rental income.

Lupus Capital has addressed problems created by weak demand in the UK and Europe by getting out of the worst-affected areas. And the US operation provides some insight into how the business should perform once better trading conditions emerge elsewhere. Granted, this is unlikely to happen soon, with activity in the coming year in the UK and Europe likely to be flat at best. Still, Lupus is positioning itself to grow strongly with any recovery, and the share price should start to reflect that

However, there are bright spots. Coventry-based doors and windows parts firm Fab & Fix, bought for £14m last August, is already making a useful contribution. And Lupus reckons it will continue to grab a larger market share, helped by an expanded product range. Having stripped out its underperforming parts, Lupus should be well placed to benefit from an uptick in the housing sector. Even though that looks unlikely in the near term in the UK, Lupus has still managed to push group turnover ahead by 5.9 per cent in the 11 months to November. Group finances have also improved markedly following the disposal of oil services unit Gall Thompson for £75m, and the interim dividend was reinstated. What's more, management reckons that it will be able to raise the full-year payout to 4p a share - twice the level that Lupus managed in 2010.

In the UK, however, the Grouphomesafe operating arm has seen a fall in orders, mainly as a result of lower activity in social housing, while at the European business, which operates as Schlegel International, modest growth in the German and eastern European markets has been more than offset by weak demand in southern Europe. Moreover, the 2012 accounts will include a €1.5m (£1.2m) provision relating to the closure of the Belgian building products business. However, UK profits should show an improvement next year, following the disposal in August of the composite doors business, which racked up operating losses of £1.1m in the first half. That said, the 2012 figures will probably include a £3m writedown of assets associated with the disposal.

Lupus Capital (LUP) designs, makes and distributes all the bits and pieces that are fitted to doors and windows; it makes other specialist goods, too - such as static control devices on photo copiers and sunroof seals for cars. Its business is also split fairly evenly down the middle between two regions: the US, where business is looking up, and the UK and Europe, where trading is still tough. Growth in the US has been enough to offset the gloomy picture elsewhere, not least because of tangible signs that US housebuilding activity has at least bottomed out. Permits for home construction last November rose to their highest level in more than four years. True, the improvement is from a low base, but in 2012 housebuilding is expected to add to US national income for the first time since 2005. Demand has also been boosted by relatively mild weather, and Lupus' underlying US operating profits jumped 22 per cent in the first half of 2012 to $9.3m (£5.7m)

What has happened at Invensys makes the break-up of Smiths more likely and that justifies buying the shares as a short-term speculation. Beyond that, there is lots of merit in the group that's not reflected in a share rating of 13 times forecast underlying earnings for the current year.

Of course, cuts to US government spending pose a threat, especially to military clients of both the detection division and Interconnect, which supplies electronic components. The US public sector may contribute a fifth of Smiths' sales; include government customers elsewhere and it's more than a third. Still, it was over 50 per cent five years ago and, according to Deutsche Bank, a fresh set of financial targets and clarity on US government spending could push the share price way past 1,300p. Expect Smiths' underlying operating profit margin to stay above 18 per cent this year, too, and keep rising thereafter. Big cost savings will help - £70m is in the bag already and detection will find another £40m by 2014. And price increases at the medical division should offset a 2.3 per cent tax on US medical devices introduced on 1 January. Moreover, US airports will soon need to upgrade security screening kit installed in a hurry after 9/11. True, that may be a couple of years out, but it gives Smiths time to get US approvals and test its new high-speed explosive detection system elsewhere. When the tenders are put out, Smiths should be in pole position.

Away from the talk of break-up, there is a strong investment case for Smiths anyway."I'd sooner bat off the fundamentals than the easy-come, easy-go furore that's accompanied the Invensys deal," says Mr Morris. And it's easy to see why. Management kept forecasts for 2012-13 unchanged after underlying revenue grew in all divisions during the three months to October, and underlying operating profit rose everywhere except medical, held back by higher sales and marketing spend. Aerospace and US housing work mean Flex-Tek, which supplies hoses, should continue to do well and orders for x-ray machines and other kit are flooding in at the detection division.

Smiths Group (SMIN) looks ripe for a break-up. We've said so before, but the recession and a big deficit in its pension funds kept things quiet. Now that Invensys and others have shown these needn't be an obstacle, interest is swirling again. The fundamentals are attractive, too. So, even after a good run, shares in Smiths are worth buying. Chief executive Philip Bowman admits Smiths is an eclectic mix. Yes, each division is profitable and diverse enough to lessen the chances of a share price shock, but, be in no doubt, Mr Bowman will sell at the right price. Pension issues scuppered the £2.45bn sale of the medical division two years ago, but, as Invensys showed last month, a pension-fund deficit no longer acts as a 'poison pill' to deter bidders. By the end of July, low interest rates had tripled Smiths' pension deficit to £620m. But analysts at Deutsche Bank reckon Smiths may only have to stick an extra £370m into the pension fund to secure a sale of the medical division - hardly a deal-breaker. What's more, a rise in bond yields of a percentage point or so could wipe out the deficit, according to Nomura. A government review of pension fund accounting methods might even do the job. Granted, selling the medical division, or the other big profit generator, John Crane, which supplies mechanical seals and bearings to oil companies, would still take some work. But Smiths could easily offload a smaller division. "Flex-Tek is an absolute gem and could be sold without ruffling any feathers," says Sandy Morris, an analyst at broker Jefferies.

Positive Points: Strong operational performance across the group was noted by management. The miner achieved record annual iron ore production and shipments. Management is now targeting cumulative savings of more than US$5 billion of operating and support costs by the end of 2014. The miner continues to place a high priority on productivity improvements at its operations. It is implementing a programme to improve the efficiency and effectiveness of its support and service functions across the business. Trucks with no drivers have been introduced at some operations. Unmanned trains, X-ray sorting machines and boring technology are all being assessed. Plans to run fully automated trains across its 1,500 km (930 mile) iron-ore rail network in northwest Australia from 2014, to help boost output by 60% by 2015 are being pursued. Rio Tinto is expected to benefit from three major sources of production growth in 2013: Expansion of iron ore production capacity at its Pilbara Western Australia operations, full commercial production from the Oyu Tolgoi copper-gold mine and the ongoing ramp up of its Yarwun 2 alumina refinery. Group investments remain ongoing. Management previously noted that "as China and other emerging economies become more consumption-led, Rio Tinto is set to benefit from mid-to-late-cycle commodities such as titanium dioxide." The business will become a more significant contributor to Rio Tinto earnings from 2013 as long-term contracts expire, increasing exposure to current market prices. During the past quarter, Rio Tinto completed the sale of further non-core businesses. Currency movements can work in the company's favour. A progressive dividend policy is currently being pursued. An interim dividend equivalent to US 72.5 cents per share was previously declared, a 34% increase compared with the 2011 interim dividend.

Negative Points: The company is exposed to volatile and potentially substantial swings in commodity prices. Accompanying management comments noted that "markets remain volatile." Natural events can and have previously impacted production. Group net debt increased from $8.5 billion at 31 December 2011 to $13.2 billion at 30 June 2012 as strong operating cash inflows were offset by outflows relating to capital expenditure, acquisitions, the increase in the dividend and the share buy-back programme. Adjusted total borrowings at 30 June 2012 were $20.5 billion. Industry-wide cost pressures remain a concern. In particular, mining hotspots where Rio Tinto maintains significant operations, such as the Pilbara region of Western Australia. The Australian government previously introduced the Minerals Resource Rent Tax (MRRT). The MRRT is a proposed tax on profits generated from the exploitation of non-renewable resources in Australia. It is the replacement for the proposed Resource Super Profit Tax (RSPT).

Highlights: Global iron ore production for the full year of 253 million tonnes (Rio Tinto share 199 million tonnes) set a new annual record, 4% higher than in 2011 The group's 30% share of mined copper production at the giant Escondida mine in Chile rose 38% during the year Alcan's aluminium annual production was 9% lower than in 2011

Fourth quarter 2012 operations review: The update broadly pleased investors, with the share price up by approximately 1% in mid morning UK trading. The Chief Executive noted that "This was another year of strong operational performance across the group. We achieved record annual iron ore production and shipments as our expansion programme continues on schedule." Rio currently derives more than two-thirds of its revenue from iron ore. In addition, its copper, bauxite, alumina, thermal coal and titanium dioxide businesses all delivered substantial production increases on 2011 levels, whilst management continued to take action in order to roll back unsustainable cost increases. Furthermore, during the quarter, Rio Tinto announced further sales of non-core businesses, including a binding agreement to sell its interest in the Palabora Mining Company. In all, despite concerns for global economic health, indicators in China have recently improved, with US political negotiations regarding the group's fiscal plans ongoing. Furthermore, at Rio itself, cost saving targets, a focus on productivity and a rising dividend all continue to support sentiment