16th October 2013
The Share Centre has tipped Smiths News as a buy saying the stock can adapt to the challenge of declining newspaper and magazine sales.
In a note issued today, it says Smiths News’ strategy to expand into other areas is on track
As Smiths News reports full year results Graham Spooner, investment research analyst at The Share Centre, says: “Smiths News’ core business in newspaper and magazine sales is in steady decline as technology evolves. However investors will be pleased to hear that management’s actions to address this and expand into other areas is proving to be successful. The business is changing by expanding into digital media, acquisition into the education and care home market and cost cutting. This morning, the company has announced it is on track to achieve its target of 50% profits outside of newspaper and magazines by 2016 and the market has responded well.
“The majority of key contracts have been extended within the core business, which provides a good level of visibility for the medium to longer term. Smiths News’ prospective yield of around 4.8% and a PE ratio of 8.9 offers potential value to investors who are prepared to back the management along its path to change. Investors will be pleased to hear the company has increased its full year dividend by 8.1% to 9.3 pence per share.”