Sunday share tips: BP, Howden Joinery, BAE Systems

24th Mar 2013 19:41

British Petroleum's announcement of an 8bn dollars share repurchase plan ellicited a 2% rise in its stock price; however, it is questionable whether that is what the company ought to be doing, the FT's Lex column says. Although under a worst-case scenario for the on-going trial in the US over the Gulf of Mexico oil spill BP would not go broke, it will see its financial flexibility restricted, particularly should a tasty acquisition emerge. Furthermore, things ave a tendency of not truing out as expected at the oil major. If Apple can hang on to 100bn dollars, then there is no reason for BP to rush and disburse 8bn dollars back to its shareholders. Kitchen and joinery purveyor Howden Joinery's Chief Executive sees scope for the company to more than double the number of its depots around the country, from 530 at the moment. Alongside the company's exceptionally entrepreneurial culture - where depot managers make their own decisions and really work hard to find new customers - that should mean that there is "plenty more growth to come and the shares, now 235p, should benefit," writes The Financial Mail on Sunday's Midas column. Interestingly, as well, depots take about seven years to reach full potential and around a third are newer than this, so they should deliver steady sales growth over the next few years. There is also scope for special dividends in the years to come given the firm's strong cash-flow. Howden Joinery is a well-run business that has managed to grow even when the housing market has been on its knees. At 235p, the shares offer long-term value and the possibility of a special dividend adds spice, Midas says. BAE Systems finds itself sandwiched between the conflicting demands from some of its major stakeholders, City investors on the one hand and the Ministry of Defence on the other. Alongside its recent yearly results the aeronautics and defence giant unveiled a £1bn share buy-back programme, which received a warm reception from the first group. These had been fuming about its attempt to merge with EADS, an initiative which was shot down by Frankfurt. Whitehall, however, is none too happy about such largesse when it will have to pick up the tab for closing one of the c company's three ship-building yards, likely Portsmouth. At the same time, the firm is asking for tax-payer funds to finance the research and development of unmanned aircraft. "Plan B was squashed by political interference and Plan A is in danger of suffering a similar fate. So, is there a Plan C? Investors must hope King has an ace up his sleeve," writes The Sunday Times's Inside the City column. 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