Investment Column: Vodafone still sending out strong signals


Our view: Buy

Share price: 168.55p (+3.25p)

The people are revolting; at least that's what the management of Vodafone will be thinking as they prepare for another round of protests and sit-ins at stores around the country.

A group called UK Uncut has already staged several demos at Voda, and at the stores of others it deems not to have paid the appropriate amount of tax, such as Philip Green's Topshop. Whatever the legitimacy of the claims, the public demonstrations have painted the group in a somewhat unfavourable light of late. While it is unlikely to have filtered heavily through to the stock, the share price has certainly come off since the end of November, after investors were disappointed by the first half results.

But beyond the protests, Voda seems to be in quite a good position. It is making a bet on the growth of smartphones, which seems sensible, and recently launched new tariffs that allow cheaper browsing while abroad. Analysts are backing revenues to grow.

In the longer term, there could be some light at the end of the tunnel for an issue that has dogged the company for years. It emerged earlier this month that Verizon Wireless could resume paying dividends to its parents Verizon and Vodafone in 2012. Or the group could sell the stake – valued at $34.4bn – entirely. Either way it is likely to be positive for investors.

The group has been selling non-core assets of late, including its stake in China Mobile, and is rumoured to be close to a sale of its 44 per cent stake in French mobile group SFR. This could prompt a share buy-back at some stage next year.

Bank of America Merrill Lynch analysts have the stock on a price of 8.7 times estimated full-year earnings for 2011 and predicts the dividend yield will rise from 5.3 per cent to 7.16 per cent two years later. Especially with recent weakness the stock is worth picking up. Buy

Intl Personal Finance

Our view: Hold

Share price: 352.2p (+9.3p)

International Personal Finance is one of those horrible companies that makes its living by offering small loans at high rates of interest to people who are faced with the Hobson's choice of either paying its prices or going to the local loanshark who will break their legs if they fail to pay up.

Where it differs from the likes of Cattles or Provident Financial is IPF's business is all done overseas (it was in fact spun out of the latter). And like it or not (we would be in the not category) the model appears to be working.

IPF's trading statement was notable for its brevity but what it did say is that it grew both customer numbers and the amount of lending but also improved collection and saw a decrease in impairments. Costs remained under control.

The company will further derive benefit from a cut to Hungarian corporation tax in the long run, and should report results in line although its key period is just coming up: the approach to Christmas when its clientele are particularly strapped for cash.

The shares have put on 25 per cent in three months (post refinancing) against 6 per cent for the market as a whole. But there's still potential for growth through international expansion, exposure to growing emerging markets and economic recovery. So the 13.4 times forecast full-year earnings at which the shares trade isn't overly pricey. Hold if you can bear to.


Our view: Hold

Share price: 400p (+3.25p)

As long as renewed snowfall doesn't block up the car parks of its shops or hinder online deliveries, Majestic Wine appears well-placed for a bumper Christmas. The 160-store retailer hasn't looked back since it halved its minimum purchase from 12 to six bottles in September 2009.

The policy is attracting new customers and enticing existing ones to shop more frequently, with the growth in transactions comfortably offsetting a decline in average spend. This was a key driver behind Majestic's growing pre-tax profits by 20 per cent to £7.3m for the half-year to 27 September.

In addition, the company raised a glass to fizzing online revenues and sales of fine wine – £20 per bottle and above – higher by 20.2 per cent over the period. All these bubbles have seen Majestic's share price nearly double this year after sinking to 213.15p in the first week of January. They now trade on a forward earnings multiple of 18.7, times, a bit frothy really. But next year may not be as bad as some fear, and there are plans to increase the number of shops to 250. So hold.

Life and Style
healthMovember isn't about a moustache trend, it saves lives
Life and Style
food + drinkFrom Mediterranean Tomato Tart to Raw Caramel Peanut Pie
Arts and Entertainment
Armstrong, left, and Bain's writing credits include Peep Show, Fresh Meat, and The Old Guys
TVThe pair have presented their view of 21st-century foibles in shows such as Peep Show and Fresh Meat
Arts and Entertainment
Keys to success: Andrew and Julian Lloyd Webber
arts + entsMrs Bach had too many kids to write the great man's music, says Julian Lloyd Webber
Arts and Entertainment
Hand out press photograph/film still from the movie Mad Max Fury Road (Downloaded from the Warner Bro's media site/Jasin Boland/© 2014 Warner Bros. Entertainment Inc.)
films'You have to try everything and it’s all a process of elimination, but ultimately you find your path'
ebooksAn unforgettable anthology of contemporary reportage
Boys to men: there’s nothing wrong with traditional ‘manly’ things, until masculinity is used to exclude people
indybest13 best grooming essentials
Arts and Entertainment
Imelda Staunton as Dolores Umbridge in the Harry Potter films

New essay by JK Rowling went live on Pottermore site on Friday

Russia Today’s new UK channel began broadcasting yesterday. Discussions so far have included why Britons see Russia as ‘the bad guy’

New UK station Russia Today gives a very bizarre view of Britain

Arts and Entertainment
Keira Knightley and Benedict Cumberbatch at the premiere of The Imitation Game at the BFI London Film Festival
filmsKeira Knightley tried to miss The Imitation Game premiere to watch Bake Off
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

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

iJobs Job Widget
iJobs Money & Business

The benefits of Recruitment at SThree...

£18000 - £23000 per annum + Comission: SThree: SThree, International Recruitme...

Trainee Recruitment Consultants

£20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...

Finance Assistant - Part time - 9 month FTC

£20000 - £23250 Per Annum pro rata: Clearwater People Solutions Ltd: Pro rata ...

Marketing Manager

£40 - 48k + Benefits: Guru Careers: We are seeking a Marketing Manager to join...

Day In a Page

Bryan Adams' heartstopping images of wounded British soldiers to go on show at Somerset House

Bryan Adams' images of wounded soldiers

Taken over the course of four years, Adams' portraits are an astonishing document of the aftermath of war
The drugs revolution starts now as MPs agree its high time for change

The drugs revolution starts now as MPs agree its high time for change

Commons debate highlights growing cross-party consensus on softening UK drugs legislation, unchanged for 43 years
The camera is turned on tabloid editors in Richard Peppiatt's 'One Rogue Reporter'

Gotcha! The camera is turned on tabloid editors

Hugh Grant says Richard Peppiatt's 'One Rogue Reporter' documentary will highlight issues raised by Leveson
Fall of the Berlin Wall: It was thanks to Mikhail Gorbachev that this symbol of division fell

Fall of the Berlin Wall

It was thanks to Gorbachev that this symbol of division fell
Halloween 2014: What makes Ouija boards, demon dolls, and evil clowns so frightening?

What makes ouija boards and demon dolls scary?

Ouija boards, demon dolls, evil children and clowns are all classic tropes of horror, and this year’s Halloween releases feature them all. What makes them so frightening, decade after decade?
A safari in modern Britain: Rose Rouse reveals how her four-year tour of Harlesden taught her as much about the UK as it did about NW10

Rose Rouse's safari in modern Britain

Rouse decided to walk and talk with as many different people as possible in her neighbourhood of Harlesden and her experiences have been published in a new book
Welcome to my world of no smell and odd tastes: How a bike accident left one woman living with unwanted food mash-ups

'My world of no smell and odd tastes'

A head injury from a bicycle accident had the surprising effect of robbing Nell Frizzell of two of her senses

Matt Parker is proud of his square roots

The "stand-up mathematician" is using comedy nights to preach maths to big audiences
Paul Scholes column: Beating Manchester City is vital part of life at Manchester United. This is first major test for Luke Shaw, Angel Di Maria and Radamel Falcao – it’s not a game to lose

Paul Scholes column

Beating City is vital part of life at United. This is first major test for Shaw, Di Maria and Falcao – it’s not a game to lose
Frank Warren: Call me an old git, but I just can't see that there's a place for women’s boxing

Frank Warren column

Call me an old git, but I just can't see that there's a place for women’s boxing
Adrian Heath interview: Former Everton striker prepares his Orlando City side for the MLS - and having Kaka in the dressing room

Adrian Heath's American dream...

Former Everton striker prepares his Orlando City side for the MLS - and having Kaka in the dressing room
Simon Hart: Manchester City will rise again but they need to change their attitude

Manchester City will rise again but they need to change their attitude

Manuel Pellegrini’s side are too good to fail and derby allows them to start again, says Simon Hart
Isis in Syria: A general reveals the lack of communication with the US - and his country's awkward relationship with their allies-by-default

A Syrian general speaks

A senior officer of Bashar al-Assad’s regime talks to Robert Fisk about his army’s brutal struggle with Isis, in a dirty war whose challenges include widespread atrocities