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Sunday share tips: IG Design, Premier Oil

Sun 01 December 2019 13:56 | A A A

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(Sharecast News) - The Mail on Sunday's Joanne Hart said IG Design tends to come into its own at this time of year - with the company making millions of festive items, including eco-Christmas crackers, wrapping paper, tags, bows and party goodies.

In her Midas Share Tips column for the Mail, Hart noted that IG chief executive Paul Fineman had admitted that Christmas was important to the group, but sales outside the festive season also contributed to its bottom line.

Hart said the blend of goodies was large, and the formula was working.

"Half-year results, released on Thursday, showed core profits up 14 per cent to £22m and a 20% increase in the interim dividend to 3p," said Hart.

The column also pointed out that Brexit uncertainty had disrupted sales but Hart said IG was fighting back, particularly in the speciality bags sector.

"Midas recommended IG Design in the summer of 2016, when the shares were £2.19. They have tripled since then to £6.60, and prospects seem bright," said Hart.

"Cautious investors may choose to sell some shares and use the money to brighten up their own festive season. But they should keep some stock, as the business still has plenty of potential."

The Sunday Times' Sam Chambers asked why so many investors were betting against exploration and production company Premier Oil?

In his Inside the City column over at the Times, Chambers pointed out that more than a fifth of the FTSE 250-listed firm's 831 million shares were out on loan, according to IHS Markit, making it the most "shorted" stock in the index.

However, he said things might not be quite as bad as they seem to be.

"Almost three-quarters of those positions are banks borrowing stock to hedge their exposure to Premier Oil," said Chambers.

Chambers did warn that Premier needed to protect itself after having sold investors contracts for difference, financial instruments that allow speculators to bet on the direction of a company's share price without actually owning any stock.

He said it appeared that Premier Oil had become somewhat of a "quasi-casino" as its shares were highly correlated with the price of oil, often moving more dramatically than the commodity price itself.

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