Wednesday newspaper tips: Falkland Oil&Gas, Blur, Carnival

25th Sep 2013 07:23

Penguin watching seems to be the new past time of investors in Falkland Oil and Gas, as for now there will be little drilling activity for over a year. That follows the lack of any discoveries of commercially viable reserves of the black stuff. Yet that is not the only reason. The problem with exploring down in the Falklands is that there is only limited kit. The Leiv Eriksson drilling rig is shared among all the other explorers so, with each drilling project running for months, the waiting list is long. Another drilling rig is not expected to float by until the final quarter of 2014. The company has now put $125m (£78m) of its cash on term deposit, out of the total of $161m cash on the balance sheet. Investors are merely paying 32p for the cash on the balance sheet, though admittedly between $70m and $80m of that cash will be required for the next round of drilling. But oil has been discovered to the north of the islands at Rockhopper's Sea Lion field. So, not for widows and orphans this one, but the shares are a cheap option for those who dare. 'Hold', says The Daily Telegraph's Questor column. "Reinventing how businesses do commerce" - that is the bold claim made by management at Blur Group. Such a statement of intentions is even bolder given its market capitalisation of £133m on the back of just £3.41m in interim revenues, the £1.85m of cash which came out of the business during that same period and the secondary fundraising undertaken over the summer. You get the picture: it´s all very late-1990s. Nevertheless, "on balance, I think there is something to this. Such business-to-business sites are growing fast; the potential size of the market is huge," writes The Timess' Tempus column. Hence, and despite Tuesday´s 14.5p drop to 449p, the shares of this dot-com provider of marketing, legal and advertising services - while as speculative as they come - are interesting, Tempus adds. Several of Carnival´s key brands continue to struggle following a difficult last two years. Its third quarter results showed as much, with bookings for the rest of this year and the first half of 2014 running behind the previous year. Then there is the tough economy in southern Europe and political tensions in the eastern Mediterranean, amongst other concerns. Hence, Tuesday´s 7% fall in the share price may not be enough. Looking out to the medium-term ageing populations bode well for the cruise industry and the company is pushing into Asia and China. Yet at 16 times´ forward earnings - which is in-line with its 10-year historical average - investors in Carnival may decide to stay ashore once a less exuberant market comes along, The FT´s Lex column says. 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