Sunday tips round-up: Compass, CPP, Firestone Diamonds

3rd Apr 2011 13:09

The Mail on Sundays says it could be time for cautious investors to get out of CPP, the identity theft and credit card insurer that saw its share price fall by two-fifths last week after the Financial Services Authority (FSA) said it was investigating the company. The FSA is looking into the way CPP sells card and identity protection products by phone. CPP has decided to suspend all new sales of identity protection via its own sales force.CPP might be able to resolve the situation quickly or the affair may drift on, the group might need to conduct an internal review and customers might need to be recompensed, The Mail notes. CPP works closely with banks, selling card protection for them. It might be able to retain these relationships, but there is no guarantee. Even courageous investors might be advised to sell at least a quarter of their existing holdings, The Mail advises.Global industries are affected by global events - and catering group Compass revealed last week that the earthquake and tsunami in Japan will reduce operating profit by about £5m. However, forecast downgrades are not expected, as growth was relatively strong elsewhere.The shares are trading on a September 2011 earnings multiple of 14.4 and yielding 3.4%. This is at an unwarranted discount to French peer Sodexo, which is trading on a current-year multiple of 17.4 and yielding just 2.8%, claims the Sunday Telegraph. Compass shares were first tipped at 306¼p in the Telegraph on November 30 2008, as a defensive play in turbulent times. The shares are up 84% since then, compared with a FTSE 100 up 39%, but they are still a "buy", the paper reckons.Diamonds have long been associated with romance in the West. Now Asian countries are developing a taste for them, with Indian and Chinese brides increasingly deciding that diamonds are a girl's best friend. At the same time, Western economies continue to clamour for them. Yet supplies are dwindling. All of which is welcome news for Firestone Diamonds, which mines in Lesotho and Botswana, says The Mail On Sunday.Shareholders will have to wait a while for the company to turn a profit but brokers forecast profits of £10m in 2012, rising to £22m in 2013 and £37m in 2014. Supporters claim the shares, languishing just below 30p, are worth twice that. Small miners are riskier than established operations, but Firestone is at least in production, notes The Mail, which recommends buying the shares.---jhPlease 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.