Sunday share tips: Thomas Cook, Watkin Jones

Thomas Cook was already facing very strong headwinds as terror attacks in Tunisia, Egypt, Paris and Belgium led tourists to revisit their travel plans but that is likely only the start of the company´s troubles, The Sunday Times´s Peter Evans said in the Inside the City column.

News that the travel operator´s summer bookings were off by 5% sent the shares lower by 19% on the day of the firm´s latest half-year figures, against the backdrop of the still unresolved crash of an EgyptAir flight in the Mediterranean.

Compounding the company´s challenges, as well as for rival TUI, TripAdvisor, the American tech-beast, is planning to start offering "full service" holidays, he explained.

Therefore, dynamics such as the recent sharp fall in short-haul package holidays seen at Thomas Cook can be expected to intensify.

The company is set to mark its 175th anniversary with a gala ball in London during the summer.

Attendees should make the most of it, as it was unlikely that there would be another to mark the company´s 200th anniversary, Evans said.

Watkin Jones is a well-managed firm in the space for student accomodation and the shares, already up since listing on the junior market in March should continue to advance, the Mail on Sunday´s Midas column says.

Tracing its beginnings back to 1791, when it was a joinery business, the company now has 88 sites spread across the country and another 31 on the drawing board.

It has also recently moved into the burgeoning private rental sector, building modern apartment blocks.

There is a generous dividend policy in place, with a payout penciled in for this year and next of about 6%.

Instead of buying finished sites from developers and them managing them, Watkin Jones will find appropiate sites, secure the necessary planning permission, line up third-party financing to develop them and is then freqently retained to manage the properties.

To do that, the company relies on a network of large institutional investors to provide the necesssary funding.

For the year ending on 30 September, the group is expected to deliver a 20% rise in pre-tax profits next to £39.5m, with £43.6m penciled in for next year.

"Watkin Jones is an attractive, well-managed business in a growing part of the property market. The fouding family still holds 48.5% of the shares and are hence "certainly incentvised" to perform - and pay out decent dividends. Buy," says the Mail on Sunday´s Midas column.