Sunday share tips: Barclays, Berendsen, Galileo Resources
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LONDON (SHARECAST) – Barclays had a “good” financial crisis. It did not need a government bail-out and it managed to snap up the investment banking arm of Lehman Brothers at a bargain price after it collapsed. However, with investment banking operations come high salaries. Across the whole sector a lot of value was being created by the operation, but a large proportion was being handed to staff in large bonuses instead of being directed to the owners – its shareholders. Nonetheless, there is no doubt that the banking sector is cheap – but things are cheap for a reason. Debt problems and sluggish growth are likely to make the sector volatile. However, the average price target of City analysts is some 23pc above the current share price and the yield is 3.1pc. Ultimately, the sector should be rerated. Indeed, banking stocks were penny shares in the 1970s crisis, before recovering substantially. Investors wishing to play this should buy and hold as a speculative position. But the rating is avoid because of the uncertainty, says the Questor team at The Sunday Telegraph.

Berendsen, which used to be known as Davis Service Group, provides textiles cleaning services in the UK and Nordic countries. Last week’s trading update confirmed that the trends seen last year have continued. The group launched a strategic review, after…………… continues on ShareCast

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