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Friday newspaper share tips: Tate&Lyle, Schroders

By Alexander Bueso

Date: Friday 04 Nov 2016

Friday newspaper share tips: Tate&Lyle, Schroders

(ShareCast News) - Tate&Lyle continues to be an attractive proposition for investors despite recent sharp share price gains, The Times's Tempus said.
The company's medium-term strategy is to reinvest profits from its bulk ingredients side into its speciality food ingredients arm, with a target of achieving 70% of profits from the latter by 2020, alongside $200m in sales from new ingredients.

Its latest set of halfway figures showed progress on all fronts, the tipster said, with new product sales ahead by 18% to $51m.

Bulk put in a particular good showing thanks to high demand for soft drinks Stateside and a corn wet-milling industry which has returned to balance.

Worth noting, the firm derives just 2% of its sales from the UK, with the lion's share of the rest denominated in US dollars. Hence, it has been a prime beneficiary of weakness in Sterling.

While gains in the stock price have erased the strong dividend yield on offer the shares remain "attractive" even if they are no longer cheap.

'Buy', Tempus said.

"The shares are not cheap but Tate & Lyle appears well placed with plenty of opportuniity to grow its speciality foods business."

Schroders had done better than most asset managers following Brexit, with net outflows more than halving in the third quarter of the year when compared to the first three months, Tempus pointed out.

A host of factors helped it achieve that result. It is among the most diversified in its sector, it has launched a new range of products and its funds under management held up well, buoyed by the drop in the pound.

Indeed, the weaker currency accounted for £10bn of the positive market performace of almost £26bn.

Nonetheless, at 16 times earnings and offering a yield of 3.2% they "look a bit expensive" so 'Avoid' Tempus advised.


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