Wednesday tips round-up: Micheal Page, IG Group

16th Jan 2013 07:15

Michael Page International's drive to cut staff and expand in developing markets seems to be paying off, with acceleration in performance in the Asia Pacific region evident during the fourth quarter. In fact, it may be seeing signs of improvement in the Chinese economy, as opposed to Germany, which proved particularly difficult in the fourth quarter. The problem is that there is almost no visibility of future revenues going into 2013 and Page accepts that the first quarter will be challenging. Analysts' forecasts for the current year are, frankly, little better than guesswork, The Times's Tempus writes. "As ever with recruiters, the question is whether the cycle has turned enough to justify buying again. Page shares sell on a sky-high 29 times last year's earnings. In the long term, the trends are favourable, but it still looks like too soon to buy," Tempus adds. Tuesday's was not quite a profit warning from IG Group, but that was only because the market knew what to expect. The financial spread-better traditionally makes more of its money in the second half of its financial year, which runs to the end of May. Yet slowing growth from earlier levels of 40% or so a year has reduced this disparity. The company is doing what it can to raise its customer base, but the days of explosive growth are probably behind it. As well, uncertainties remain over the Nadex operation in the United States, which is taking longer than expected to reach profitability. There is also the impact of any European transaction tax, although the company is dubious whether this will ever amount to much ? and I am inclined to agree. The shares sell on about 13½ times earnings, full value unless you think the markets are heading into turmoil again.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