Friday newspaper share tips: Mixed views on Cranswick

Cranswick was on the plate on Friday as hungry newspaper tippers eyed up what to do with Britain’s largest sausage producer.

The FTSE 250 listed company released a first half trading update on Thursday, with first half revenues 10% ahead from the previous year, sales up 7% and the outlook for further growth was looking positive.

The Telegraph’s Questor said that while a sharp fall in pig prices had hit the company, demand from households suffering a financial squeeze has increased. With pork being a staple protein source for Europe, it drives steady demand.

On the business side, it said Cranswick’s track record is excellent and has a strong balance sheet. Questor also noted the above inflation dividend increase make it worth holding the shares for the long term.

But The Times’ Tempus has gone off the taste of pork and thinks the shares should be avoided for now. It said Cranswick’s focus is to increase exports to China and finding more acquisitions, funded by the strong balance sheet. With the shares at 16 times earnings, Tempus said it looks a bit too high despite the outlook.

Tempus also had some thoughts on Johnson Matthey, recommending it’s a good time to buy shares in the catalytic converter company. The company had a poor summer, even before everything that happened with VW, after slowing demand from China and a fall in the value of precious metals.

It seems the market has also assumed they’ll be hit hard by the Volkswagen scandal, but Tempus said while analysts have struggled to assess the impact the emissions scandal on earnings, it looks limited. That’s why Tempus thinks the share price fall is overdone and traders should buy.