Companies: CBY    CLL    RWD   

Two food stocks are digested by analyst Charles Pick this month: liquid milk processor Robert Wiseman and meat products supplier Canterbury Foods. Wiseman remains on track for record milk production volumes in 2005/06 and is expecting to sell 1.33 billion litres of milk – 9.9 per cent up on 2004/05, even though it lost business with Asda and Morrison’s. The good news is that it gained with recovering Sainsbury’s and now has 60 per cent of Tesco’s liquid milk supply business – ‘a massive plus given its huge and sustained momentum’.

Pick takes his axe to Canterbury, describing it as a ‘weak hold- and-hope situation’, with a price target of 6p, 1p less than at present. With an enterprise value of £21.7 million representing 51 per cent of possible 2005 sales, ‘the best case scenario for shareholders looks to be that this ratio will attract a bidder for the group or, failing this, that Canterbury’s management can somehow offload the Meat Products division on half-respectable terms.’

In the media sector, Corporate Synergy has upgraded forecasts for marketing services provider Cello, to which analyst Simon Lapthorne attaches an ‘accumulate’ tag, having given the stock a ‘reduce’ in May and a ‘hold’ in July. September’s maiden interims reflected a strong first-half performance and were accompanied by a positive outlook statement. The overall impact was an increase in the broker’s forecast for this year and next. Earnings for 2005 should hit 10.5p and jump to 13.2p in 2006, giving respective p/e ratios of 12.7 and ten. A six-month share price target of 150p is set.