Sunday share tips: Poundland, Rio Tinto, Fox Marble

12th Apr 2015 16:21

Buy shares in Poundland, recommended the Sunday Times' Inside the City column. Last week the Competition and Markets Authority (CMA) threatened to potentially block Poundland's takeover of rival 99p Stores unless it sold off almost a hundred stores or submit the deal to a long inquiry by the regulator. Poundland's board has been left with a big decision, but if it chooses the "long-hard slog" of an deeper inquiry it could cement the discounter's supremacy in a niche that has blossomed amid continuing economic austerity.Shares in Kosovo marble quarrier Fox Marble are cheap, Midas said in the Mail on Sunday. The AIM-listed company's sites are home to some of the most highly prized stone in the world, including White Sivec, used to build the extraordinary Grand Mosque in Abu Dhabi. At 17.75p, below its 2012 float price of 20p, the shares are unappreciated due to investor scepticism of the region that Fox has since gone some way to dispelling. Although results for 2014 out this coming week are noting, but, with an order backlog of £2m, 2015 should be pivotal in terms of sales and profits and the stock's price should respond. "Adventurous investors should pick some up now."Avoid shares in Rio Tinto said Questor in the Telegraph. Even though the iron ore giant remains a prodigious cash generator with a good dividend, iron ore prices are depressed and as long as they stay low the payout will remain under pressure. City broker Investec recently downgraded the stock over a "toxic combination" of excess supply and weaker demand from the Chinese steel industry. True, Rio Tinto is highly cash generative and, as one of the lowest cost producers in the mining industry, it can remain profitable with prices at current levels, but the $2bn share buyback programme and the increased dividend are largesses that cannot go on forever if prices remain depressed for too long. 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 and 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.