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The Expert View: Hilton Food Group, Stock Spirits, Cranswick

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by Harry Brooks on Dec 03, 2013 at 05:01

A roundup of analysts' commentary on shares, also including Senior and Clean Air Power.

Our daily round-up of analyst recommendations and commentary, featuring Hilton Food Group, Stock Spirits, Cranswick, Senior and Clean Air Power.

If you'd like to receive news alerts on any of the stocks mentioned in The Expert View, click on the star icons below to add them to your favourites. To buy shares via JP Morgan, click on the shopping trolley icon.

Key stats
Market capitalisation£306m
No. of shares out72m
No. of shares floating42m
No. of common shareholdersnot stated
No. of employees2266
Trading volume (10 day avg.)0m
Turnover£1,031m
Profit before tax£18m
Earnings per share24.67p
Cashflow per share46.70p
Cash per share44.35p

*Correct as at 2 Dec 2013

Peel Hunt upgrades Hilton Food Group on Tesco deal

Peel Hunt has upgraded meatpacker Hilton Food Group (HFG.L) from 'hold' to 'buy' after it won a major contract with Tesco.

Hilton currently supplies about half of Tesco's beef, and the five-year deal that's been agreed should see this rise to about 70%. 'This will add £3 million to 2015 forecasts and more than offsets the impact of tough market conditions in Europe,' analyst Charles Hall said.

'This deal reinforces Hilton’s position in a major market, improves long-term visibility and increases 2015E by 9%. We are increasing our target price from 400p to 475p and our recommendation from Hold to Buy.'

Shares in the group closed at 428.9p on Monday, up 3.8p or 0.9%.

Key stats
Market capitalisation£511m
No. of shares out200m
No. of shares floating187m
No. of common shareholdersnot stated
No. of employees962
Trading volume (10 day avg.)0m
Turnover243m EUR
Profit before tax22m EUR
Earnings per share0.11 EUR
Cashflow per share0.22 EUR
Cash per share0.58 EUR

*Correct as at 2 Dec 2013

Berenberg initiates Stock Spirits at 'buy'

Berenberg has initiated Stock Spirits Group (STC.L) with a 'buy' recommendation following its London listing in October.

Stock Spirits is the leading spirits maker in Central and Eastern Europe, and it's led by a UK-based management team. The strength of this team is one of the factors behind Berenberg analyst Philip Morrisey's positivity on the shares.

'The company’s highly experienced executive team is almost without exception made up of former senior management figures from global beverage companies, giving it significant competitive advantage, in our view, versus its competition, which largely consists of small local players,' he said.

Morrisey also believes Stock Spirits is an attractive potential acquisition or merger candidate.

Shares in the group closed at 257p on Monday, up 7.3p or 2.9%.

Key stats
Market capitalisation£569m
No. of shares out49m
No. of shares floating45m
No. of common shareholdersnot stated
No. of employees4402
Trading volume (10 day avg.)0m
Turnover£875m
Profit before tax£36m
Earnings per share74.70p
Cashflow per share106.96p
Cash per share15.73p

*Correct as at 2 Dec 2013

Investec lifts share price for Cranswick

Food producer Cranswick (CWK.L) has further to rally, according to Investec.

'It’s a familiar pattern now for followers of Cranswick: pig prices rise, the share price wobbles, but then recovers as the margin pressure recedes,' analyst Nicola Mallard said, reiterating her 'buy' recommendation.

'The group has confirmed margins are now improving in 2H, hence the recent small rally. However, we think the stock price has more ground to recover as it effectively missed the mid cap re-rating of recent months.'

Mallard's target price rises from £12.30 to £12.75.

Shares in the group closed at £11.55 on Monday, up 14p or 1.2%.

Key stats
Market capitalisation£1,207m
No. of shares out416m
No. of shares floating412m
No. of common shareholdersnot stated
No. of employees6171
Trading volume (10 day avg.)0m
Turnover£712m
Profit before tax£67m
Earnings per share15.90p
Cashflow per share21.90p
Cash per share10.75p

*Correct as at 2 Dec 2013

'Buy' Senior, Jefferies says

Aerospace engineering business Senior (SNR.L)'s acquisition of component manufacturer Thermal Engineering is a sensible move, according to Jefferies.

Senior is paying Privet Capital and a number of individual shareholders £28.3 million for Thermal Engineering, funded from the group’s existing cash and debt facilities.

'This looks a very sensible bolt-on to us, and according to management, is a ''classic Senior acquisition'',' analyst Andy Douglas said.

'Thermal bring new capabilities into the Senior group and existing margins look acceptable to us (although some very modest investment is needed in the business in the near-term, we suspect that earnings margins will be held and possibly nudge higher over time) and we like the increased exposure to the large commercial aerospace sector.'

Jefferies has a 'buy' recommendation on Senior.

Shares in the group closed at 290.5p on Monday, up 0.3p or 0.1%.

Key stats
Market capitalisation£19m
No. of shares out177m
No. of shares floating138m
No. of common shareholdersnot stated
No. of employees60
Trading volume (10 day avg.)0m
Turnover£8m
Profit before tax£-2m
Earnings per share-1.53p
Cashflow per share-0.75p
Cash per share1.81p

*Correct as at 2 Dec 2013

Cantor backs Clean Air Power with 'buy' stance

Cantor Fitzgerald has reiterated its 'buy' recommendation on dual-fuel specialist Clean Air Power (CAP.L) on the back of a trading update.

So far this year the company has sold about 400 units. This is a big improvement on the 300 units sold last year, but somewhat lower than the 450 units analyst Caroline de La Soujeole had predicted.

'We believe CAP is moving in the right direction. The co-operation agreementsigned with Ricardo in September already seems to be bearing fruit with today’s statement noting that the partnership was delivering ''tangible progress'',' she said.

'We are BUYers of the shares as we believe CAP has an attractive technology with significant growth potential and the company is well positioned to take advantage of the growing, gas powered, vehicle markets worldwide.'

Shares in the group closed at 10.3p on Monday, down 0.6p or 5.3%.

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