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Friday newspaper share tips: Booker, Premier Oil, Hargreaves Lansdown

By Alexander Bueso

Date: Friday 14 Oct 2016

Friday newspaper share tips: Booker, Premier Oil, Hargreaves Lansdown

(ShareCast News) - Shares in Booker are worth holding onto notwithstanding the high multiple on which they are trading, The Times's Tempus said.
Since company boss Charles Wilson took the helm in 2005, the shares arrested a decline that saw them drop to less than 8p in 2007 to then recover to 185p as of yesterday.

In just over four years, the grocery supplier to small shops and restaurants had returned more than £180m to its shareholders and as of the half-year to September nearly £106m has already piled up at the bank again.

The company has also moved into catering, from which it now derives almost a third of its £5bn in revenues.

While Booker is not immune to the tough trading environment, recent acquisitions mean that sales accelerated from 10% growth in the first quarter to 15% in the second.

At 24 times' profits the stock is "highly-rated" Tempus judged but was nevertheless a 'hold'.

"Booker's overall performance has been excellent in difficult markets, but all that seems reflected in a high multiple."

If you're looking for immediate sources of higher income, Premier Oil's 5% December 2020 bond might be an alternative, The Daily Telegraph's Questor team said.

It is a high risk bond, a 5% coupon is not high, and liquidity is dear but the oil explorer's travails - and those of the wider sector - pushed them down to 38p at one point in January, versus 81p at present.

Indeed, the yield to maturity stood at 10.9% at last count.

Questor also advised that investors replicating its suggested portfolio offset that risk by buying an equal amount of Tesco's 6% 2029 bond.

The long-term trend favours Hargreaves Lansdown but its first quarter numbers revealed caution among the retail investors that use its Vantage dealing platform due to the uncertainty surrounding Brexit and everything else, Tempus said.

Given that the shares are trading at a very high multiple of 30 times' earnings, the reaction to any bad news can be pronounced, so the tipster recommended that investors "Avoid".


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