Brokers' Views: Milkstone Stockbrokers

Milkstone’s David Gorman still likes the look of recent superb price performer Stobart, with the transport and logistics group poised for strong growth.

Stobart posted normalised pre-tax profits of £12.4 million (2008: £11 million) in an upbeat first half and is off to a flyer in the second. Forecasting improved profits of £28 million and increased earnings of 8p for the year to February – placing the 128p shares on a forward p/e of 16 – Gorman remains a buyer of the shares ‘even after their recent run and the fairly racey p/e ratio’.

Meanwhile, the Milkstone team urges investors to sit tight at three poor price performers. IPTV digital set-top box provider Amino Technologies is worth holding at 30p, despite shocking the market with a profit warning caused by order delays and supplier component shortages. Among other positives, AIM-quoted Amino is cutting costs, says second half order intake has improved and has £8 million cash in the coffers.

Though distribution concern Brammer recently announced a rights issue to address borrowings, its shares are worth sticking with at 126p, with the business winning market share and looking ‘well positioned to benefit from an upturn when it eventually comes’. Another taking fundraising action to address gearing is UK Coal, which recently disappointed with the news its production projections have been scaled back. Regardless, Milkstone says the shares are a ‘hold’ at 86.5p, pointing out the potential of its 40,000-acre land bank. ‘No need yet to rush in and buy; existing holders must remain patient’, comments the aforementioned Gorman.