Tuesday tips round-up: Sirius Minerals, St Ives, Prudential

13th Aug 2013 06:49

Sirius Minerals' refinancing should allow the company to begin on its potash mine under the North York Moors National Park. However uncertainties remain including planning permission and pricing pressures, The Times' Tempus column noted. The shares have halved since last month over such concerns. Prices remain stable but if they fall they could affect the profit and other large potash mines being built. Yet the miner insists its own pricing model is sturdy as it can produce at only 37 dollars a tonne. The financing will raise 25m pounds through the issue of securities to a New York institutional investor. Sirius has pre-sold a fifth of future production from the project to the Chinese and another fifth is the subject of various forward sales agreements. Sirius remains an exciting prospect and, with the shares at their low level, this could be seen as a buying opportunity but they remain highly speculative so only invest money you can afford to lose. St Ives is nearing the end of its transition from a traditional printing business to one dominated by marketing services, Tempus said. While 20% of revenues still come from printing, St Ives has exited various less profitable printing markets. The company now focuses on book printing, outdoor graphics and point-of-sale displays. The business is a market leader, throws off cash and there are unlikely to be any willing purchasers at a decent price. Its direction is indicated by two acquisitions this spring including Amaze which advises on the building of websites and e-commerce and Branded3, a search engine optimisation specialist. Marketing services activity now accounts for 40% of operating profits and, once further acquisitions are carried out, will go past the 50% level. They could have further to run, but one suspects not immediately. Hold. Prudential is like a box of chocolates with goodies including an Asian business, asset management, US insurance and UK life (the hazelnut praline that nobody likes), according to the Financial Times' Lex column. "But what if you bought individual chocolates rather than the box?" For exposure to Asia, the obvious choice is AIA. It is larger, with $1.5bn of first-half operating profit against £476m from Prudential in Asia, so has more potential for economies of scale. The UK life and asset management businesses, which account for a third of Prudential's profits, could both be replicated by Legal & General. In UK life L&G has the edge - its UK life profits were up 6.0% in the first half against a 1.0% at the Pru. That leaves the US, where the Pru uses the Jackson brand. All three are growing as the economy recovers. US profits from the UK's Prudential rose a third in the first half, although an acquisition was partly to thank. 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.