By This Is Money Reporter
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We round-up the Sunday newspaper share tips. This week a look at RBS' share consolidation, Experian, Weir, SuperGroup and 3i
Out of fashion: SuperGroup is one of the shares featured in today's papers
The recent announcement by RBS that it was planning a share consolidation has alarmed some of its 214,000 individual shareholders, who will have the chance to vote on the plan at the annual meeting on May 30. Given that the Government holds 66 per cent of the voting shares, these resolutions will be passed as a formality.
RBS is proposing a two-stage process. In the first step, each share will be divided into a new ordinary share and a new deferred share. Immediately after this split comes the consolidation. For every ten ordinary shares the investor then receives one new share. Meanwhile, the deferred shares are given back to RBS, which will then cancel them.
In practice, at the end of the process each shareholder will hold one new share for every ten old ones they held. Each new share will be worth ten times the value of the old ones. So, ignoring any share price movements, an investor who today holds 100 shares worth 24p each will after the consolidation own ten worth 240p each. This process will apply to all shareholders, including the Government.
The best that can be said of this move is that it might at the margin make a tiny difference to the sharp movements in the share price. At worst it will have no effect at all and will prove a bit of a waste of time, effort and money.
Midas tipped credit-checker Experian shares in January 2007, reckoning them to be worth buying at 589p. Few will need reminding how turbulent the next two years turned out to be, but a further tip at 442p in April 2009 turned out to also be profitable.
Last week, Experian reported growth in turnover and profits for the year to March 2012 ahead of forecasts. The shares are now 928.50p, representing a 58 per cent gain from our first tip and 110 per cent from April 2009.
This is a decent valuation and those who bought on our tips could take a profit, selling perhaps half to two-thirds of their shares â€" this will give you your money back plus a healthy profit.
But prospects for the years ahead are still strong, so you could keep hold of some of your shares for the long term.Â
Sunday Telegraph
Pump and valves specialist Weir last week flagged a weakness in demand for oil and gas equipment, with orders down by 26% on a like-for-like basis in the first quarter of the year. However it still maintained its full-year guidance due to better than expected orders at its mining equipment unit and strong growth in power and industrials, up 27%.
Each of its sectors is in a long-term bull market as the global population rises and demand for energy and basic materials increases, meaning that long-term prospects outweigh short-term issues in some of its markets. Although they are likely to be volatile, shares are a buy at 1546p.
The unique selling point of 3i Infrastructure over other such funds listed on the London stock market is its Indian exposure. The company has a stake in 3i India Infrastructure Fund, which accounts for about 13% of its assets.
Despite a weak rupee and a near-40% fall in the price of one of its listed investments, the fund managed to grow its net asset value (NAV) per share over the year to 121p from 120.3p. The income from the portfolio over the year of £73.1 million fully covered all dividends and company costs.
The reason to own these shares is for income, with the company aiming to yield 5% of the starting NAV each year. Investors should not expect rapid share price gains, but a steady rate of growth over time, with the income being the priority. Shares, at 124.6p, are a buy.
Sunday Times
Supergroup has taken a tumble but it insists it is not a one-trick pony. It has been caught out by a frantic attempt to grow with s ales up 675 per cent in four years. Flat sales at existing stores capped a disappointing end to a challenging year but at such a low ebb the shares might be worth a punt, after all £15 buys either a pair of orange underpants or five shares in their maker.
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