Thursday tips round-up: Admiral, Glencore

20th Aug 2015 10:57

(ShareCast News) - Admiral surprised the market on Wednesday by beating profit expectations and improving customer numbers, the Financial Times' Lex wrote.The insurer has a low cost base, the Lex wrote, which works its favour in a highly competitive market.Lex said the insurer's limited near-term growth options explain why it needs to entice investors with a 6% dividend yield.While the company stays ahead by selling other services alongside its services, Lex said other companies have similar business models so the extras become less important."In the past, water seemed to slide off Admiral's back. No longer. Its main market may well be saturated," the column said.The Telegraph's Questor warned to investors stay away from embattled miner Glencore.Glencore chief executive Ivan Glasenberg is backing himself in one of the greatest trades of his life, and Questor said it was concerned he is backing himself and his investors into a corner.Questor said Glasenberg fundamentally believes in China and that the long-term demand for commodities mean prices will recover."Perhaps for the first time we are now seeing a FTSE 100 company and its balance sheet being used to fund a trading position," Questor said.Glasenberg would like investors to believe Glencore is a steady income-generating stock that simply buys mining assets on a long-term view and then sells its produce through a trading division that collects a margin on every deal, Questor wrote."Questor thinks investors should stay well away from the shares as there are huge risks if prices fall further," the column said.