Mindful Money’s weekly shares watch: Marston’s, FirstGroup & Vedanta Resources

6th October 2014

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Marston’s latest sales tally will be front and centre when the FTSE 250 listed pub group delivers a pre-close trading update on Wednesday.

Shares in the brewer, whose history goes back to 1890 have not set the world on fire of late, where over the past year they are down by 1% and by 4% over six months.

Sheridan Admans, investment research manager at The Share Centre, who lists the group a ‘buy’ notes that some analysts have suggested that they expect to see a slowdown in revenue growth due to adverse weather in August and September. While the overall broker sentiment is pointing to a ‘buy’ on Digital Look, JP Morgan Casenove recently reiterated its ‘neutral’ stance on the shares.

Admans says: “Investors will also be interested in any guidance on profit margins, news of how the company’s F Plan strategy (which is targeting food, families, females and forty/fifty somethings) is progressing and how many new build pubs have been completed.”

Fellow FTSE 250 constituent and transport firm FirstGroup is also reporting on Wednesday, with its half year trading update. Its shares have suffered in the past six months, falling 13% but despite the drop, ahead of the report the broker consensus presently denotes a ‘buy’.

Keith Bowman, equity analyst at Hargreaves Lansdown Stockbrokers points out that firm’s first quarter trading proved to be in line with management’s expectation and he expects the second quarter and half year is likely to meet expectations too, with the board again updating on its transformation programmes which were outlined at its investor day back in January.

Bowman says: “Operating approximately a quarter of the UK’s passenger rail network, an update regarding competitions for UK rail franchises may be forthcoming, with the group back in August short listed for the TransPennine Express franchise competition by the Department for Transport.”

Friday sees miner Vedanta Resources update with its second quarter production results. While the firm, which has its main operations based in India, has witnessed its shares fall 11% over the past year and by 18% over three months, the consensus is pointing towards a ‘buy’ – notably Deutsche has just reiterated its own upbeat note, while Barclays has reaffirmed its own ‘underweight’ recommendation.

For his part Admans is upbeat on the group’s prospects and is calling the shares a ‘buy’. He says: “We expect a continuation of the good production figures from Vedanta’s update. Production should remain near record levels for both oil and gas and investors will welcome exploration updates from the Cairn India energy business. Investors will also look out for commentary on the resumption of production in iron ore in various states after mining bans were lifted. Commentary on the company’s debt, which is relatively high, will also be worth noting.”

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