Sunday share tips: TalkTalk, Provident Financial

25th Oct 2015 13:31

(ShareCast News) - The negative impact on Talktalk after the company admitted that customer data - such as credit card details and birth dates - may have been stolen will stick. It was the third data breach this year and will hurt the firm's attempt to repair its reputation with customers. It also raises concerns regarding managerial oversight.The shares had already lost 40% before the mishap, on doubts about the company's profit targets. The broadband provider was aiming to save £140m by March 2017, in part by cutting the number of call centres. That now looks optimistic. It was also hoping to slash customer turnover - good luck. Until they can draw a line under customer data issues, management should keep mum on profit targets, says the Financial Times's Lex column.Provident Financial's share price has been on a tear in the last year but a look under the bonnet reveals the strains that has placed on the motor of those gains, UK households' indebtedness. Non-mortgage household debt in Britain jumped 9% last year, its fastest in a decade. Research from PwC found that by Christmas the typical family will have racked up over £10,000 on credit cards, personal loans and overdrafts.The company has spread its tentacles into every corner of the market for people who cannot get credit from banks. However, what happens when and if the economic weather changes or wage growth slows down? A lot of debts will go unpaid. "Provident has proved adept at managing in that tricky world, but investors are giving it a bit too much credit, so to speak," says Danny Fortson in his Inside the City column in The Sunday Times.