Despite having fallen by almost 17 per cent since their May highs shares
of British Land are not cheap nor is this the time to buy them, rather the opposite. That is, above all, because of the significant shift witnessed in some of the main pillars underpinning the British property market as credit markets tighten, in part as a result of tapering by the US Fed. Martin Allen, analyst at Deutsche Bank, said: "We expect tapering of US quantitative easing over the next 12 months to reduce the liquidity in the global financial system on which property shares thrive." Then there is the over-heating of property prices in London's West End and the fact that the company is one of the most indebted within its sector. On Deutsche Bank analysis, the British Land net debt to net assets is 83%, compared with the UK average of 61%. Furthermore, the shares currently trade at about an 8% discount to the 2013 forecast net asset value (NAV), compared to a long-term average discount at about 11%. Finally, the shares have fallen through the technical support level of their 200-day moving average. It is time to take profits and the shares are downgraded to a sell, The Daily Telegraph´s Questor team says.
EasyJet, the airline group, yesterday reported strong growth in passenger numbers, bout 230,000 more passengers flew on its planes in August when compared with the same month last year. Of particular interest, that stands in sharp contrast to some of its rivals, one of which -RyanAir, launched a profit warning just the day before. However, Questor thinks the rapid growth and more is already priced into the sky-high share rating, so it may be about time for a pullback. Thus, any slip up in traffic numbers may provoke an outsized reaction in the stock. Following a parabolic year to date rise of 61% the shares now trade on a 2013 earnings multiple of 13.4 times, well above the 12-month average earnings multiple of about 10.8 times. Investors are now paying more than 2.4 times the net asset value for the shares, when the 12-month average is about 1.3 times. Yet the only gains that Questor likes are those safely in the bank, so after an incredibly strong run easyJet is downgraded to a sell, from a buy.
AG Barr is not sitting around moping after the failure of its planned "nil premium" soft drinks merger with Britvic this summer. Proof of that is its recent invitation to analysts for a visit of its new production and warehouse facility at Milton Keynes. The analysts were generally impressed, given that the project came in on budget and slightly ahead of schedule despite other distractions. The plant takes some of the pressure off Barr's Cumbernauld facility, where production has been constrained by a shortage of capacity. It also helps the Scottish company's drive southwards with brands that sell well there, such as KA, Rubicon and Rockstar. That comes ahead of the company´s interim figures, which are due out in a couple of weeks. Barr shares have traditionally traded on a high multiple about 21 times´ earnings because of the company's perceived strengths. Expensive, but not in the longer term, writes The Times´s Tempus.
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