Takeovers abound
07/26/2004
Everyone is going on a shopping spree. Not the consumer, although they are too, but the corporates. A takeover a week by the looks of it. So it is Abbey National's turn. Who's next. Okay, pick the laggard in a sector, the one who has fallen from grace. Let's see, I spy with my little eye: Royal & Sun Alliance, Amvescap, Rentokil, Bradford and Bingley. Would I dare say GlaxoSmithKline? Well if M&S are on the cards then why not? What then of BT Group.
All of the above have singularly failed to return shareholder value of late. Buy 'em, break 'em up, or turn 'em around - it's your choice.
What about the FTSE 250 candidates? Colt Telecom, Misys, Thus? Okay enough speculation.
Trading conditions remain tight - ie short-term declines on medium term uptrends (I don't like these types of trades as it is easy to be caught out as the upward move comes early). Xstrata is one for instance.
Northern Rock looks oversold, found a platform, and steady. A contingent order on a break above the recent high of 725p, would see a buyer chase 780p over a 4 month period.
Value-Growth
Examining my proprietary value and growth criteria based on a mix of revenue, earnings growth and valuation factors, it is slim pickings. Centrica comes up, and even if the rhythm the price has been exhibiting means that despite a medium-term uptrend it shows a short-term downtrend to 220p, it should continue higher in the medium (3-4 month plus) time-frame.
Alliance Unichem has had a fantastic run from 500p in February to nearly 700p this month. Although again it shows some short-term weakness, for the 6 month outlook I expect a 15% gain.
Greene King is also on the list, and this one has actually started falling in the short-term, but my analysis suggests the medium-term uptrend will kick-in in about 1 month and rises be steady thereafter. My fear is it is too early to say where we will hit a base from the recent falls (£10?) before rising again.
Chemring shows nothing for the chartist in the short-term, except mild bearishness. But on value-growth there remains a sensible target of 450p in 2-3 months.
(For ADVFN bookstore users there is a special offer: a free CDROM going over some key trades from the previous month - these CDROMs are free each month to purchasers of the 15 multimedia audio-visual CDROMs on 'How To Invest Better' from the ADVFN bookstore under 'Alpesh' in the search engine. For everyone buying the full 15 set - just drop me a separate email and the publishers will arrange for signed copies of two of my latest books plus the free CDROMs every 4 weeks, for 12 months.)
Crazy Small Stock
On this we have ASOS, Desire Petroleum, Fuller Smith & Turner, Bisichi Mining.
All pure adrenalin momentum plays - not recommendations but simply 'crazy small stocks which may continue steep rises (or turn and burn) - but they almost certainly won't stand still.
|