Sunday share tips: BT Group, Cairn Energy, Dixons

23rd Jun 2013 18:46

Did outgoing BT Chief Ian Livingston do a good job? Well, the company´s shares fell 3.7 per cent on the announcement, wiping away 1bn pounds from its stockmarket value, so it would certainly seem so. Even so, its stock is up thrice from its 2009 low. Nevertheless, his successor will have to deliver on the company´s recent and expensive move to go 'toe-to-toe' against BskyB, by offering live Premier League football to subscribers - for free, says The Sunday Telegraph´s Questor team. The shares are trading on a 2014 earnings multiple of 11.9, falling to 10.7, and the prospective yield is 3.5 per cent, rising to 4.0. Given that valuation, and all of the above, Questor keeps a hold rating on BT. When investors value a company at less than its cash on hand, together with some of its industrial stakes, that is a bad sign. Be it due to worries that a Chinese slowdown will hit the oil price, or because they are just fed up with oil companies, who have a penchant for promising much and delivering far less, investors don't want to hear it. Then there is the poor experience - and memories - resulting from Cairn Energy´s expensive foray into waters off Greenland. Nevertheless, while investors feeling uninspired is understandable, up to a point, it feels overdone. Especially since Cairn, unlike many of its rivals, has delivered before, writes The Sunday Times´s Danny Fortson. Investors were right to concentrate on electronic retailer Dixons 4% jump in UK like-for-like sales in its latest full-year results to the end of April, instead of the £115.3m pre-tax loss in which it incurred. That performance was nothing short of stellar given the backdrop of a troubled High Street. More importanly, the company is in the process of implementing what Questor characterises as an impresisve long-term strategy to beat the 'on-line' competition. As well, now that the firm is back in a net cash position a shareholder pay-out may be on the horizon. However, the City was disappointed by the lack of plans to resolve problems at its Pixmania unit. That risks holding the share price back. Hold, says Questor.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