Thursday tips round-up: Henderson, Moneysupermarket, Melrose

Investors have applauded Henderson's New Star deal, more than doubling the share price from 50œp in January 2009 to yesterday's close of 122.1p. The price has eased since January amid predictions of a forthcoming market correction and renewed worries that a double-dip recession will weaken consumer confidence. A buy for economic bulls, according to the Times.

Moneysupermarket insists the special dividend, the second this year, reflects its confidence but long-term investors may be forgiven for saying they have heard it all before. The shares, up 2œp at 72p last night, remain cheap - although not with the July 2007 issue price of 200p - for a dot-com stock. But there is a reason for that. Avoid, says the Times.

Melrose Resources, the Edinburgh-based group which yesterday said that it had met its production expectations for 2009, trades at 0.76 times Numis's estimated net asset value. That is below the company's peer group of small and mid-cap E&Ps. They pay a dividend - a rarity in this sector. Besides Romania, analysts are awaiting news from Egypt, which could also help to drive performance. Melrose is one to watch. Buy, says the Independent.

Ferrochrome miner International Ferro Metals (IFM) was first tipped by the Telegraph at 56œp last August but by December, with the shares having lost more than half their value, the tip was labelled an "utter disaster" and its timing "utterly wrong". The stock has gained 33pc since the gloom of our December analysis, but investors should hang on for the brighter outlook. Hold, says the Telegraph.
Disappointingly, New World Resources - which is majority-owned by Zdenek Bakala, a Czech businessman - has negotiated metallurgical product prices only for the first quarter of 2010, at EUR103 per tonne for coking coal, a mere 18 per cent rise on 2009, when the market looked much bleaker. However, there has been some eyebrow-raising over corporate governance issues in its links with Ferrexpo. Kostyantin Zhevago, who owns 51 per cent of Ferrexpo, sits on the NWR board. For now, best avoided, writes the Times.

The Independent agrees and says that the company claims its safety performance is improving. But there were still five fatalities in its mines in the last 12 months, one of them the day before the results were published. Add to that the fact that the share price has already roughly doubled since last summer, and New World Resources is a sell.


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