Wednesday tips round-up: St James Place, Croda, President Energy

26th Feb 2014 07:20

Investing in a single stock is disliked by many investors, yet the share price appreciation seen in St James's Place easily outpaces the performance of almost any fund manager. The stock has run up by two thirds over the past year and yesterday jumped by another five per cent following better than expected full year results. The company's business model seems to be quite successful. It distributes investment products through its partners, with client money management left to third parties. In 2013 that netted the company a 42 per cent increase in its pre-tax profits to 191m pounds, while funds under management rose grew by close to a third, reaching 44bn pounds. However, its financials have surely been helped by rising equity markets and the recent revamping of the sector's regulatory framework, via The Retail Distribution Review. As well, Lloyds' exit has made for a more liquid stock, with the firm now on the fringes of the Footsie. "All the excitement has pushed them up to 22 times earnings, ahead of all of its direct rivals with the exception of Hargreaves Lansdown (which has a very different business model). More excitement is already priced in," says The Financial Times' Lex column.Global speciality chemicals maker Croda is a hugely cash generative and well-diversified outfit. Little wonder then, perhaps, that its margins are rising. The outfit works in 34 different countries and services sectors ranging from personal healthcare to agriculture. In general terms it is doing all the right things, but there is little that it can do about the strength in sterling. Its profits before tax grew by 5.4% in 2013, to reach £251.4m. However, had the rate of sterling at the year-end been applied to the entire year, then that figure would have been reduced by £39m, setting up some headwinds for 2014. Even so, the stock sells on a now more reasonable 17 times earnings for this year, which suggests further progress in due course, writes The Times' Tempus. Shares of President Energy fell back following the issue of fresh equity but Canaccord Genuity has put out a positive note on the company. The explorer's assets in Paraguay are starting to attract the market's attention and the above broker has put a target of 51p on the shares, versus 32p at Tuesday's close. Tempus points out that this is his selected oil tiddler for the year.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