MARKETS have turned choppy and investors need to take care. Some of the huge gains on bombed-out tech stocks, which had run far ahead of any upturn in the companies’ fortunes, are ebbing away.<\/p>\n
But there are still gains to be made on the right stocks.<\/p>\n
One exciting debut due this month is IP2IPO, the intellectual property venture born out of broker Evolution.<\/p>\n
All the signs are that it will make a strong start.<\/p>\n
Sadly, it is not living up to its cumbersome name (Intellectual Property to Initial Public Offer) by offering its own shares to the public. Instead, it is placing them through broker KBC Peel Hunt. So most investors can buy only in the market.<\/p>\n
IP2IPO has rights over a slew of research from top UK universities.<\/p>\n
That could spawn share floats over several years and is exciting hedge funds and other professional investors. The shares may be priced at about 275p and could quickly go above 3 when dealings start.<\/p>\n
But there may be chances to pick them up at better prices when the initial excitement subsides. Another way in is through Evolution’s own shares, though these have run from 66p when first tipped here to 87p.<\/p>\n
Meantime, thank heaven for housebuilders. Investors may have been slow to realise their value, but the industry itself has not. The sector has seen a steady stream of bids both small and large.<\/p>\n
The latest is for GallifordTry, itself the product of a 2000 merger between Galliford in Leicester and West London builder Try. Initially, the mix did not work entirely smoothly and cost overruns pushed construction projects-side into the red. The shares had fallen to 221\/4p in January when I chose them as my share of the year. They were then at under four times 2004 earnings, one of the cheapest ratings on the market.<\/p>\n
Garvis Snook, of rival builder Rok Property Solutions, recognised as much with a bid approach this week.<\/p>\n
He offered 51p a share in cash and paper. The paper offer would be underwritten, so investors could take all cash. The shares rose to 451\/2p.<\/p>\n
No thanks, said Galliford promptly.<\/p>\n
We are worth much more.<\/p>\n
Chief executive David Calverley has a point. He has been sorting out the problems and Galliford has two jewels in its crown a land bank of 640 acres, and the redevelopment of the former Fairfield Hospital site near Letchworth in Hertfordshire.<\/p>\n
Stephen Rawlinson at broker Arbuthnot expects profits of 20m this year for earnings of 6.2p. That means a take- out price should be close to 60p.<\/p>\n
A bid is not certain. Rok’s shares have soared from 134p to 242p, but it is still valued at just over 60m. Its first shot at Galliford would cost 113m and push its debt gearing towards 100pc. Hostile bids are dangerous in the building trade.<\/p>\n
Without a bid, Galliford could slip back below 40p, so if they get above 55p, it might be wise to take some profits. But hold on for the ride.<\/p>\n","protected":false},"excerpt":{"rendered":"
MARKETS have turned choppy and investors need to take care. Some of the huge gains on bombed-out tech stocks, which had run far ahead of any upturn in the companies’ fortunes, are ebbing away. But there are still gains to […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-1281","post","type-post","status-publish","format-standard","hentry","category-hedgeco-news"],"_links":{"self":[{"href":"https:\/\/www.hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/1281","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.hedgeco.net\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.hedgeco.net\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.hedgeco.net\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.hedgeco.net\/news\/wp-json\/wp\/v2\/comments?post=1281"}],"version-history":[{"count":0,"href":"https:\/\/www.hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/1281\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.hedgeco.net\/news\/wp-json\/wp\/v2\/media?parent=1281"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.hedgeco.net\/news\/wp-json\/wp\/v2\/categories?post=1281"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.hedgeco.net\/news\/wp-json\/wp\/v2\/tags?post=1281"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}