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The Expert View: Speedy Hire, SuperGroup and Moneysupermarket

A roundup of analysts' commentary on shares, also including Compass Group and Hangar 8.

Our daily round-up of analyst recommendations and commentary, featuring Speedy Hire, SuperGroup, Moneysupermarket, Compass Group and Hangar 8.

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Key stats
Market capitalisation£282m
No. of shares out518m
No. of shares floating501m
No. of common shareholdersnot stated
No. of employees3776
Trading volume (10 day avg.)1m
Turnover£340m
Profit before tax£9m
Earnings per share1.70p
Cashflow per share12.04p
Cash per share0.04p

*Correct as at 29 Nov 2013

Shore Capital downgrades Speedy Hire on accounting irregularities

Shore Capital has downgraded tool-hire firm Speedy Hire (SDY.L) from 'buy' to 'sell' following a warning of accounting irregularities.

The company's chief executive Steve Corcoran announced on Thursday that he would step down while the finance director and other senior managers of the international business were suspended following the discovery of the problem in the Middle East business, where it's believed control processes were 'repeatedly and deliberately circumvented', according to the announcement.

Shore Capital's David O’Brien warned that the news could have an immediate impact on trading: 'While management has stated that it is not in breach of its financial covenants, there has been ''a breach of certain other items'',' he said.

'We think this may well prove to have material implications for its customers, who may well reconsider their options in order to ensure that their projects, some of which will be under time penalties, are completed on time.'

Shares in the group closed at 50.5p on Friday, down 14p or 21.7%.

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Key stats
Market capitalisation£967m
No. of shares out80m
No. of shares floating39m
No. of common shareholdersnot stated
No. of employees2022
Trading volume (10 day avg.)0m
Turnover£360m
Profit before tax£36m
Earnings per share44.29p
Cashflow per share67.24p
Cash per share67.74p

*Correct as at 29 Nov 2013

SuperGroup set for a bumper Christmas, Investec says

Fashion retailer SuperGroup (SPG.L) is on track for strong sales over the critical Christmas trading period, according to Investec, which has a 'buy' recommendation on the shares.

The company will report its first-half figures on 12 December, and analyst Kate Calvert is expecting a 20% rise in pre-tax profits.

'An update on its infrastructure investment plans, online and recent bolt-on acquisitions is expected, together with confirmation that its opening programme is on track,' she said.

'Overall, we expect a confident team ahead of the key Christmas quarter given how well the autumn/winter ranges seem to have been received.'

Calvert has a target price of £15.

Shares in the group closed at £12.03 on Friday, up 3p or 0.3%.

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Key stats
Market capitalisation£979m
No. of shares out542m
No. of shares floating360m
No. of common shareholdersnot stated
No. of employees475
Trading volume (10 day avg.)1m
Turnover£205m
Profit before tax£25m
Earnings per share4.71p
Cashflow per share10.34p
Cash per share3.48p

*Correct as at 29 Nov 2013

'Buy' Moneysupermarket Group, Canaccord says

Canaccord has reiterated its 'buy' recommendation on Moneysupermarket (MONY.L) despite news that the FCA is launching a review of insurance price comparison sites.

Insurance operations account for 59% of Moneysupermarket's revenues, analyst Simon Davies said. Any changes in regulations are potentially important for the company.

However, he believes it's not as bad as it might sound. '[The review] is focusing on transparency and conflicts of interest (and given that MONY is the only one of the big four price comparison sites that is not at least part owned by an insurance group, it scores well on the latter point).

'We expect some requirement to improve disclosures, potentially resulting in a modest increase in costs, but we do not expect a material impact on MONY.'

Shares in the group closed at 181.9p on Friday, up 1.6p or 0.9%.

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Key stats
Market capitalisation£16,693m
No. of shares out1,797m
No. of shares floating1,787m
No. of common shareholdersnot stated
No. of employees508714
Trading volume (10 day avg.)4m
Turnover£17,557m
Profit before tax£426m
Earnings per share23.24p
Cashflow per share41.31p
Cash per share55.76p

*Correct as at 29 Nov 2013

UBS increases target price on Compass Group

UBS has increased its target price for contract caterer Compass Group (CPG.L) on the back of an encouraging annual update.

Revenues came in at £17.6 billion, beating analyst Jarrod Castle's estimate of £17.5 billion. Operating profits of £1.26 billion were also ahead of Castle's estimate.

Although the update was generally positive, the analyst did note the currency movements would weigh on results in the year ahead. 'Based on current exchange rates the headwind to 2013 operating profit is over £50 million while we estimate circa £0.7 billion in revenues. Although we are positive on 2014e we have slightly reduced our earnings per share estimates by 1.5% to take into account the currency headwind.'

Nonetheless, the analyst's target price rises from 900p to 920p, and he reiterated his 'buy' recommendation.

Shares in the group closed at 921p on Friday, down 1p or 0.1%.

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Key stats
Market capitalisation£21m
No. of shares out9m
No. of shares floating4m
No. of common shareholdersnot stated
No. of employees52
Trading volume (10 day avg.)0m
Turnover£17m
Profit before tax£0m
Earnings per share4.76p
Cashflow per share6.70p
Cash per share12.24p

*Correct as at 29 Nov 2013

'Buy' Hangar 8, Westhouse says

Westhouse has initiated aircraft logistics specialist Hangar 8 (HGR8.L) with a 'buy' recommendation, saying the valuation doesn't reflect the strong outlook for the company.

Hangar 8 operates privately owned jet aircraft, encompassing chartering, operational support and engineering support services.

'With signs of recovery in its end markets, we believe the combination of growth, high returns and balance sheet strength on offer are not reflected in 2014E price to earnings and enterprise value/earnings multiples of 10x and 4.6x, respectively. We initiate with a Buy rating and a 270p target price, ' analyst Kevin Fogarty said.

'We initiate with a Buy rating and a 270p target price.'

Shares in the group closed at 225.9p on Friday, up 5.9p or 2.7%.

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