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Stocks to Double in 2006 - we name them
DiogenesJ - Sat, 10 Dec 05 :
My only objections to BPRG would be that it is a rampers' stock (tens of thousands of posts on its bulletin boards). It has never made a profit. Turnover in H1 was £1.3m, and it lost £6.16m. I can only find one broker's forecast, by Numis (22 November). They say it will lose another £3m in H2. I guess that at that point it will just about have used up its cash pile and will have to raise more cash or go out of business. It may double, it may halve, it may go down to nothing, but I'd say it's not predictable.
I've got two 2006 doublers. They're not new, in fact they are old favourites, but none the worse for that.
1. Homebuy (HBG) 225p
This was one of DoubleorQuits' picks last year, and it all but doubled. I think it will do so again.
Average of three brokers' forecasts (Equity Development, Edison, and KBCPH):
Year to 17 April
2006 23.80p (+92.6%), PE 9.45x
2007 31.10p (+30.67%), PE 7.23x
2008 40.75p (+31.03%), PE 5.52x
Target price 467p, based on a modest forward PE of 15 for 2007. There's nothing cheaper or better available on the market imo.
2. Neteller (NLR) 721p
Pulled down recently by the Partygaming collapse and director sales, but now recovering. Doubled last year and likely to double again imo. Not without risk, of course, because of the nature of the online gambling business which it serves, and the uncertainty about the US legal position.
Consensus eps forecasts (Numis, Canaccord, Evolution and Panmure Gordon):
Year to 31/12
2005 41.31p (+116%), PE 17.45x
2006 61.48p (+48.83%), PE 11.73x
2007 83.07p (+35.12%), PE 8.68x
Current target price (based on a forward PE of 20 for 2006) £12.30 - but quite modest upgrades could easily raise that to £14.00.
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