Thursday tips round-up: Punch Taverns. Juniper Fund Management, Tullow

16th Jan 2014 07:55

Punch Taverns' Chief Executive Stephen Billingham has quite a challenge in front of him. He is trying to force bondholders and shareholders to agree on a debt restructuring plan but, as one might suspect, no one wants to budge. Making matters worse, there are no less than 16 different tranches of senior and junior debt, on top of which comes the equity. The company wants to remove the guaranteed income stream which has been afforded to existing junior bondholders in case of default. In order to do so, however, senior bondholders fear the firm might undermine the asset base - the properties - which pretty much assures them they could get face value even in the case of a default. Furthermore, a scan of its shareholder register reveals the presence of hedge funds who refuse to be diluted in order to finance any restructuring. Billingham has his work cut out for him, especially seeing how senior bondholders may be willing to risk a default, says the Financial Times' Lex column. Juniper Fund Management may have reached an inflection point, past which it can begin returning cash to shareholders but at 14 times earnings its valuation is already full, so the shares are only a 'hold', says The Times' Tempus. Total funds under management rose by 5.9% to £31.7bn in the last quarter, with about a third of that coming from new funds. More important even, the firm has now paid off all of its debt and has amassed sufficient regulatory capital so as to meet its requirements. Hence, one might assume that the increasing cash pile will be returned to investors in the company, including its own staff. Having said that, given its dominant position in the UK retail market there seems to be grounds for expecting the fund manager to try and expand overseas. Tullow Oil should be a play for investors despite a 50 per cent fall in the explorer and producer's shares in the last two years, according to a respected British newspaper investment column. Failure to significantly boost 2013 oil and gas production against that of 2012 and a poor run of drilling results last year has reduced the appeal of the stock, according to the Financial Times' Lex Column. But investors are overlooking Tullow's competitive edge in Africa, where it has done a lot to establish the continent's oil and gas potential, Lex said. Tullow, which has exploration licences throughout Europe, South Asia and Africa, made its name over the past decade opening new oil areas in Ghana and Uganda, as well as Kenya.They also are not taking into account the company's appeal as a potential takeover target, the paper said. Earlier this week, Tullow doubled its estimate of its find in Kenya's South Lokichar basin to 600m barrels following two successful well results. "Tuesday's trading update was a reminder of why it should pay to own Tullow again," Lex said.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