Wednesday tips round-up: IG Group, Apple, Hargreaves Services

24th Jul 2013 06:46

Spread-betting company IG Group had a subdued first half but things have improved significantly as worries over withdrawal of quantitative easing in the US and a collapse in the price of gold encouraged trading on the group's platform, The Telegraph's Questor column pointed out. Revenues finished the year down by about 1.0%, with pre-tax profits up 3.2%, boosted by cost-saving measures. But Tim Howkins, Chief Executive, said the second half improved on news events including the US fiscal cliff negotiations and a sustained period of rising equity markets. International expansion is key for future growth. IG opened up in Germany and Singapore seven years ago and both businesses are still growing strongly. Trading on a 2014 earnings multiple of 15.3, falling to 13.7, the shares have rallied sharply over the last few months and Questor recommends a 'hold'. Apple on Tuesday delivered quarterly results that were roughly in line with expectations, the Financial Times' Lex column said. There were 31m iPhones shipped against an expectation of 27m or so. In contrast, iPad sales were a mild disappointment, at 15m units versus the hoped for 18m which are cause for reflection. Not only did average sale prices of iPads fall but unit sales fell year-over-year for the first time, just two-and-a-half years after the product was introduced. After six years, the iPhone has yet to report a year-over-year unit decline which further reinforces the point that the iPhone - the source of half of Apple's sales - is an exceptional product that, should it fade, will prove hard to replace. Apple's shares will probably remain in a holding pattern "until that next revolutionary product rolls around," Lex reckons.Hargreaves Services, which has open-cast mines at the huge old Tower colliery in South Wales, is fast becoming the last man standing in Britain's coal industry following the closure of the nation's biggest colliery, the bailout of UK Coal by the Pension Protection Fund and collapse of the Scottish industry. However, The Times' Tempus column reckons "the woes of its peers are not necessarily a bad thing". The failure of the companies controlling Scottish coalmining has enabled Hargreaves to pick up assets north of the border at knockdown prices, doubling its own prospective production to four million tonnes a year. Hargreaves is well-balanced as it produces half the coal it delivers and it sources and trades the other half. But the key issue is long-term demand. Hargreaves is currently trading at a discount which is explained by the huge uncertainty in the industry, Tempus added, recommending a 'hold'. 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.