Tuesday tips round-up: Hammerson, DX Group

17th Feb 2015 12:25

Shares in Hammerson have outperformed the market smartly over the last year, rising by 22%, with the bulk of those gains having materialised this year. Investor interest in the retail property sector boosted its net asset value by just over a tenth last year. The stock is now at a 7% premium to book value - its loftiest level since 2009. Furthermore, Savills property group sees rental growth in prime retail speeding ahead by 5.6% this year, clocking in only behind prime office space.The company also has hefty investment plans in place. It is expecting to splash out £1.5bn over the coming five years on three big projects. That is quite a sum of money but given the low cost of debt it should not stretch the company's resources. Nonetheless, the stock is no longer cheap, so "don't linger too long," says the Financial Times's Lex column.The price war in the logistics space has put a major dent in the share price of recently floated DX Group. After jumping as high as 145p last May the shares closed on Monday at 94.75p. The decision by Amazon.com to launch its own delivery service has not helped matters any. Conditions are so difficult that even the demise of competitor City Link, on Christamas Eve, has failed to benefit any of its competitors. The company says some rivals "continue to offer unsustainably low prices". Maybe so, but as history suggests, price wars can go on longer than logic would suggest, writes The Times's Tempus.The company's share price is underpinned by its 6% dividend yield, but any serious doubts regarding that would see the stock get clobbered. On Monday, company chief Petar Cvetkovic was clearly wary of committing to a 4p final dividend, though in the end he confirmed it - in an elliptical fashion. Avoid the stock, Tempus concludes.