The Week In Review: Jaded Wetherspoon could be worth a gamble

JD Wetherspoon

The City's analysts are near-unanimously negative on JD Wetherspoon shares. For 10 sell recommendations on the pubs chain, there is a lone positive tip.

Debt is high and interest cover low in this company, a hangover from its aggressive expansion to its current size of 650 pubs, which had to be halted for safety's sake when trading deteriorated. So Wetherspoon is only for investors willing to take risks.

But any moderation in the vicious trading environment will feed through to profits, and things appear to be stabilising. Like-for-like sales, down 1.7 per cent in August, were only 0.9 per cent lower. The new licensing laws will allow extended opening hours, a good opportunity.

The shares look pricey on 17 times existing forecasts. The lonely "buy" case is that the forecasts are too cautious. Have a punt.


After the devastation wrought by the US hurricanes, premiums for catastrophe reinsurance are expected to rise 23 per cent next year, and for oil rig insurance by 46 per cent. This is the time to be in insurance shares. Kiln - which we tipped at 86.5p in April - is a buy.


Conglomerate BBA is separating off its "non-woven materials" business, Fiberweb. That leaves the company to focus on its aviation work - it's good news, but the disposal will dilute earnings per share, dulling some of the benefit of the re-rating that more focus should bring. Take profits.


CSR designs the chips behind Bluetooth, the wireless technology. With a 56 per cent market share, the group produced a 151 per cent jump in third-quarter profits. The shares are cheap at 18 times earnings, though CSR got 60 per cent of its sales from just five customers in the past quarter. Speculative buy.


Friends Provident's strong position in group pensions makes it one of the best-placed insurers to capitalise on pension reforms next year. And though sales of protection policies have slowed, this should improve as the property market stabilises, because life and health insurance are often sold with mortgages. Buy.


The consumer slowdown has hit Clinton, but the card shop hopes that by Christmas, we will all have paid back enough debt to be able to splurge once more. However, Clinton's cards business is being poached by the supermarkets and its Birthdays acquisition now looks miscalculated. Sell.


Lok'n Store, with 21 sites, is one of the top five players in warehouse storage, and looks a good opportunity. Not only is there much more growth to come, the business could fall prey to a bigger player. Buy.


Carphone Warehouse organised phone contracts for 1.55 million people in the six months to 1 October, a one-fifth increase on last year, and is tipped to keep growing at this rate. Add in its own fixed-line telecoms network, which allows it to offer cheap broadband, and the shares look worth their full rating.


Investors would be wrong to interpret Rentokil's latest trading update as the first shoots of a recovery. It will take longer to reap the rewards of long overdue investment in the business. Sell.


Shire Pharmaceuticals, one of The Independent's tips of 2005, is up 28 per cent since the start of the year, having turned itself, in the City's eyes, from a one-trick pony to a stable of exciting new drug products. A large chunk of sales still come from one particular drug, but Shire should stay a bookies' favourite. Buy.

Demand for Rolls-Royce's aircraft engines is soaring

Rolls-Royce is a national champion, a UK giant that controls 40 per cent of the market for civil aircraft engines, and its management is in ebullient mood. Cost-cutting measures have paid off and demand for engines is now soaring again.

New super-size planes developed by Boeing and Airbus, both of which can take Rolls-Royce engines, are not the only reason for the upturn. The growth of airline travel in Asia, and of low-cost airlines in the West, are also boosting orders.

Best of all, planes are in the air more, which means vital servicing and maintenance work comes round more often, which is the most profitable work for Rolls-Royce.

The civil aircraft side has further to go; the power-generator and marine-engine businesses are ticking along nicely. Buy the shares.

The above are recommendations taken from the daily investment column.

Pro-Russia rebels guard a train containing the bodies of victims of the Malaysia Airlines flight MH 17 crash in Torez, Ukraine
Life and Style
Child's play: letting young people roam outdoors directly contradicts the current climate
lifeHow much independence should children have?
Arts and Entertainment
Tycoons' text: Warren Buffett and Bill Gates both cite John Brookes' 'Business Adventures' as their favourite book
booksFind out why America's richest men are reading John Brookes
Sign here, please: Magna Carta Island
propertyYours for a cool £4m
The Commonwealth flag flies outside Westminster Abbey in central London
Arts and Entertainment
Struggling actors who scrape a living working in repertory theatres should get paid a 'living wage', Sir Ian McKellen has claimed
Skye McCole Bartusiak's mother said she didn't use drink or drugs
peopleActress was known for role in Mel Gibson film The Patriot
Arts and Entertainment
filmThe Rock to play DC character in superhero film
Arts and Entertainment
Damon Albarn is starting work on a new West End musical
artsStar's 'leftfield experimental opera' is turning mainstream
Life and Style
Paul and his father
artsPaul Carter wants to play his own father in the film of his memoirs
Ben Stokes trudges off after his latest batting failure for England as Ishant Sharma celebrates one of his seven wickets
Arts and Entertainment
Members of the public are invited to submit their 'sexcapades' to Russell T Davies' new series Tofu
Sky's Colin Brazier rummages through an MH17 victim's belongings live on air
Arts and Entertainment
Keira Knightley and Benedict Cumberbatch star in the Alan Turing biopic The Imitation Game
arts + ents'The Imitation Game' stars Benedict Cumberbatch and Keira Knightley
Finacial products from our partners
Property search
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Training Programme Manager (Learning and Development)-London

    £28000 - £32000 per annum + benefits: Ashdown Group: Training Programme Manage...

    Training/Learning and Development Coordinator -London

    £28000 - £32000 per annum: Ashdown Group: Training/Learning and Development Co...

    Business Analyst (Systems/ Incident Analyst)

    £40000 - £50000 Per Annum: Clearwater People Solutions Ltd: Business Analyst r...

    BA/PM - Client Data

    £500 - £550 per day: Orgtel: BA/PM - Client Data London (Greater)

    Day In a Page

    Some are reformed drug addicts. Some are single mums. All are on benefits. But now these so-called 'scroungers’ are fighting back

    The 'scroungers’ fight back

    The welfare claimants battling to alter stereotypes
    Amazing video shows Nasa 'flame extinguishment experiment' in action

    Fireballs in space

    Amazing video shows Nasa's 'flame extinguishment experiment' in action
    A Bible for billionaires

    A Bible for billionaires

    Find out why America's richest men are reading John Brookes
    Paranoid parenting is on the rise - and our children are suffering because of it

    Paranoid parenting is on the rise

    And our children are suffering because of it
    For sale: Island where the Magna Carta was sealed

    Magna Carta Island goes on sale

    Yours for a cool £4m
    Phone hacking scandal special report: The slide into crime at the 'News of the World'

    The hacker's tale: the slide into crime at the 'News of the World'

    Glenn Mulcaire was jailed for six months for intercepting phone messages. James Hanning tells his story in a new book. This is an extract
    We flinch, but there are degrees of paedophilia

    We flinch, but there are degrees of paedophilia

    Child abusers are not all the same, yet the idea of treating them differently in relation to the severity of their crimes has somehow become controversial
    The truth about conspiracy theories is that some require considering

    The truth about conspiracy theories is that some require considering

    For instance, did Isis kill the Israeli teenagers to trigger a war, asks Patrick Cockburn
    Alistair Carmichael: 'The UK as a whole is greater than the sum of its parts'

    Alistair Carmichael: 'The UK as a whole is greater than the sum of its parts'

    Meet the man who doesn't want to go down in history as the country's last Scottish Secretary
    Legoland Windsor's master model-makers reveal the tricks of their trade (including how to stop the kids wrecking your Eiffel Tower)

    Meet the people who play with Lego for a living

    They are the master builders: Lego's crack team of model-makers, who have just glued down the last of 650,000 bricks as they recreate Paris in Windsor. Susie Mesure goes behind the scenes
    The 20 best days out for the summer holidays: From Spitfires to summer ferry sailings

    20 best days out for the summer holidays

    From summer ferry sailings in Tyne and Wear and adventure days at Bear Grylls Survival Academy to Spitfires at the Imperial War Museum Duxford and bog-snorkelling at the World Alternative Games...
    Open-air theatres: If all the world is a stage, then everyone gets in on the act

    All the wood’s a stage

    Open-air productions are the cue for better box-office receipts, new audiences, more interesting artistic challenges – and a picnic
    Rand Paul is a Republican with an eye on the world

    Rupert Cornwell: A Republican with an eye on the world

    Rand Paul is laying out his presidential stall by taking on his party's disastrous record on foreign policy
    Self-preservation society: Pickles are moving from the side of your plate to become the star dish

    Self-preservation society

    Pickles are moving from the side of your plate to become the star dish
    Generation gap opens a career sinkhole

    Britons live ever longer, but still society persists in glorifying youth

    We are living longer but considered 'past it' younger, the reshuffle suggests. There may be trouble ahead, says DJ Taylor