Tuesday newspaper share tips: Iofina, Carr's Group

Iofina shares are worth a punt, albeit admittedly being ‘extremely high-risk’, The Daily Telegraph’s Questor said.

Stock in the iodine manufacturer shot higher by almost 85.0% after the company said in a first half production it as confident of meeting its full-year target for output.

Furthermore, the price of iodine – which it strips out from the brine water that results from natural gas fields in the US - appeared to be stabilising, management said.

During the first quarter its price fell below the $25 per kilogram mark.

Nevertheless, the shares plummeted by 74.0% over the last 12 months, hitting an all-time low last week.

Making matters worse, production was interrupted last year by an earthquake.

Looking ahead to when it reports annual results next month, analysts are looking for a loss before tax of approximately $2m on the back of $22m in revenues.

“This is extremely high-risk but a trading buy,” Questor said.

Carlisle-based Carr’s Group believes the agricultural sector faces two more years of pain, as the dairy crisis worsens and the price of beef tumbles.

The food and engineering group’s boss Tim Davies said there was no ‘short-term fix’ to the situation, adding that the outlook was worsening.

His remarks came after a 6.0% drop in farm gate prices for mike in February in comparison to a year before and as incomes for cattle farmers hit five-year lows.

Its business in the States on the other hand has held up better, boosted by “outstanding” sales of animal feed blocks as cattle herds were rebuilt in the wake of the severe drought seen from 2010 to 2012.

AIM-listed Carr’s agricultural unit also managed to improve its first-half operating profits to £7.4m from £6.7m.

In parallel, the Chirton engineering arm endured a tough start to the year as oil prices plunged.

All told, turnover at the group was 9.4% lower over the six months to the end of February, reaching £189.1m.

Despite the hard times, the stock is trading on a conservative price-to-earnings multiple of just 11 times profits and the annual dividend is forecast to grow by 4.0% to 3.8p.

Hold, says Questor.