City File: Bluebird shares fly high

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The Independent Online
SHARES in Bluebird Toys jumped 53p to reach 808p on Friday, a far cry from their 26p low at Christmas 1990. Since then the shares have ridden the boom engendered by two midget toys, Mighty Max and Polly Pocket. The market took Friday's surge to indicate that this week's AGM will bring news that Far East distributors are short of stock. Despite the rise, the shares are still on a mere 13 times 1994 earnings. Hang on.

DON'T be deterred from buying into Allied-Lyons because of Grand Met's downbeat assessment of the American liquor market. Allied's biggest, albeit well-trumpeted problem is Carlsberg-Tetley. Graeme Eadie of NatWest Securities expects Allied to announce profits of only pounds 96m from the joint venture this week, even though Allied made pounds 90m in its last year as an independent brewer. But Allied has a lot going for it, including a yield of 5.1 per cent on the expected 22.1p dividend, an increasingly aggressive stance in marketing its excellent liquor brands, and the opening up of prospects in Spain and Latin America by the purchase of Pedro Domecq. Sales of some of Allied's food brands could improve the cash flow position no end.

IF Allied feels too big to be tasty, the south-west England drinks group Eldridge Pope has a link with its bigger brother and is recovering after a couple of unfortunate diversifications. These ended in a pounds 1.2m restructuring charge but the brewer is now back to basics, concentrating on brewing, pubs and wholesale and retail wines and spirits.

Key to its prospects is a link-up with Carlsberg-Tetley, whereby Eldridge will put its Thomas Hardy Country Bitter on C-T lorries. That will help to absorb Eldridge's ample spare capacity.

While the firm may be affected by the flood of cheap drinks from Channel ports, it should increase profits from pounds 1.8m to pounds 2.3m for the year to September. The shares have fallen from 180p to 151p since January after a strong run last year. A good time to buy.

IN its present gloomy mood, the market is tending to lump all new issues together as bad news. This provides some juicy buying opportunities. Best at the moment is Ireland's biggest industrial holding company, DCC.

Over the past 18 years DCC has built up a well-spread and increasingly profitable portfolio in sectors ranging from oil to printing and publishing, and including a major stake in the Fyffes banana business. Because DCC started as the Irish equivalent of 3i, most of the shares are tightly held by major institutions, so the issue consisted only of a relatively small placing. But they are well worth snapping up at anywhere near the 250p issue price where they are on a prospective p/e of a mere 11.4, well below any of their English-based equivalents.

BUY CarnaudMetalbox, say stockbrokers Paribas Capital Markets. The shares, which are quoted in London, have come back from pounds 25 to pounds 21.50 this year on the back of rising steel prices and worries about the European recession.

But the group also has a foothold in the booming Far East, and the economic upturn making steel dearer should also boost demand for packaging.

Paribas expects the CMB's profits to rise from Fr835m (pounds 98m) to Fr875m this year and Fr97m in 1995. That would take the earnings multiple down from 18 to an attractive 15.2.

MONUMENT Oil & Gas, one of the largest independent exploration groups, has hardly been touched by the excitement over the Lasmo-Enterprise bid. But shares in the group, which is headed by industry personality Tony Craven Walker, could soar above their present 69p once Monument seals its deal to sell gas from its major field in Argentina to a Government- controlled gas corporation.

Even better, the field is so close to a major pipeline that it could be producing in a matter of weeks. And to help cash flow, gas will be flowing by the end of next year from the Liverpool Bay offshore gas field, in which Monument has a 20 per cent stake.

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