Sunday share tips: Meggitt, Morrissons, Frenkel Topping

Meggitt shares were a 'buy' for the Sunday Times' Inside the City column, after the aerospace technology group revealed it would conduct a sweeping review of operations as sales are predicted to grow. Almost a year and a half after its last profit warning, and seven months since activist fund Elliott Advisors took a 5% stake, Meggitt is a much improved company.

Having rooted about for finer details on the company from suppliers, customers and former staff, Elliott analysed its workload before putting its demands to chairman Nigel Rudd. Seemingly as a result, the review followed, while ex-Rolls-Royce director Tony Wood is CEO in waiting, and shares are on the up. Elliott's final demand was for the company to be sold, with larger rivals likely to be attracted to its aircraft brakes and engine de-icing gear even more now the housekeeping has been done.

Buy shares in Morrisons, said Questor in the Sunday Telegraph, a year after quarterly sales growth reappeared after four years of decline. But what next for chief executive David Potts, after last year's turnaround? Morrisons is expected to deliver more good news with its preliminary results on Thursday and perhaps an update on strategy.

There is potential for the Bradford-based retailer to set new targets for free cash and cost savings, along with an update on its balance sheet and the slimming of its property estate. While rivals have gone down the acquisitive route, Potts is more likely to look at a special dividend or buyback programme, in time.

Shares in Frenkel Topping have plenty of potential, said Midas in the Mail on Sunday. While insurers were gnashing their teeth over the government's changes to payment calculations for personal injury claims, it is good news for this oddly-named company that manages money for victims of tragic accidents. Moreover, chairman Jason Granite is pushing through a transformation in the business.

Hard-nosed former investment banker Granite runs a private investment firm, FCFM, where Icap founder Michael Spencer is the second-largest shareholder, and between them own 17% of Frenkel. One of their biggest changes to the business is for group to begin managing customers’ money, rather than just advise them on what to do with it, which boosts its profits and, it says, is cheaper for customers than investment managers. After the compensation rule changes, profits for the current year are forecast to rise from £1.5m last year to at least £3.4m, rising to more than £4m for 2018.

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