Free Stock Tips

The share price of newspaper group Trinity Mirror (LSE: TNI.L – news)  is down by a half over the last year and a third over the last month, prompting broker Panmure Gordon to suggest that the timing might be right for the group to embark on a share buy-back programme.

The broker thinks that buying back the shares would not only shore up earnings per share but would also be a positive signal from the company on its business prospects.

Buying back 10% of the shares in issue would, according to the broker’s number crunching, result in a boost to earnings per share of around 15%.

“On our estimates, Trinity (Munich: A0YDBV – news) should generate c£50m plus in free cash flow after pension deficit funding. If the company was to buy back 10% of shares outstanding (the maximum), it would cost c£20m. This is a safety margin of c£30m,” notes analyst Alex DeGroote.

Panmure Gordon remains an advocate of buying the stock and has a target price of 175p, about a pound above the current share price.

“The market has been spooked by 1) the adverse performance in Nationals advertising (Sept -5.9%); and 2) a worse than expected environment for newsprint pricing in FY 2011 (+15% year on year, vs +5% previously). The share price volatility and/or exposure to weak print classifieds, will ward off many investors. However, we still consider there to be a lot of upside in this contrarian investment case,” DeGroote concluded.

Managed hosting and cloud computing specialist Iomart Group (LSE: IOM.L – news) delivered a strong set of interim results, though whether the figures were good enough to justify the stock’s premium valuation is something that is currently under consideration at finnCap.

Ahead of the analysts meeting with the company finnCap analyst Andrew Darley was minded to upgraded his estimates for full year earnings before interest, tax, depreciation and amortisation (EBITDA) by around 4%, while next year’s EBITDA projection is set to be increased by 5%.

“Revenue of £11.4m exceeded expectations by 5%, while EBITDA of £2.6m outperformed by 7%. The strength comes both from iomart hosting and Easyspace, with a contracted recurring revenue base which continues to leverage the technical property assets of the data centre portfolio (Glasgow, London, Maidenhead, Nottingham and Leicester),” Darley said.

The broker is contemplating whether to stick with its “buy” recommendation as the share price approaches finnCap’s target price of 100p.

“Momentum is evident and we continue to see strength in both the current performance and the opportunity. Nevertheless the stock is expensive and we will review our recommendation after the analyst meeting,” Darley said.

Oil explorer Nighthawk Energy (Berlin: DWO.BE – news) has announced the results of its strategic review and it did not take long for the market to look at the size of the write-downs the company announced and slice around a fifth of the value from the company’s share price.

Resource (399319.SZ – news) sector specialist Westhouse Securities remains an advocate of the stock, however, and supports the company’s decision to focus exclusively on its Jolly Ranch asset.

“While the write down of non-core assets is regrettable, the group’s exit from these activities and the renewed primary focus on Jolly Ranch is welcome, given the tremendous upside the project represents. This was demonstrated in 2009, when Schlumberger (NYSE: SLB – news) reported that P50 [proved + probable] oil in place was 1.462bn barrels gross, over c246,000 acres. The project is now over 410,000 acres,” the investment house said.

Monday’s announcement has resulted in Westhouse taking a scythe to its price target for Nighthawk, however. The new target price is 37p, down from 88p previously.

“This new target reflects a modest $5m valuation for Revere/Cisco Springs and a reduced value associated with Jolly Ranch to reflect its early stage of development. However, given that the shares are trading at around 11p this morning, we are retaining our BUY recommendation,” Westhouse concluded.