Tuesday newspaper share tips: Old Mutual still highly exposed

The Telegraph's Questor was keeping an eye on the very volatile Old Mutual on Tuesday.

The shares started to rebound on Monday after last week's losses due to political issues in South Africa.

A broker downgrade and weaker rand weighed on the stock on Thursday last week, compounded by South Africa's president unexpectedly sacking finance minister Nhlanhla Nene, replacing him with relatively unknown David van Rooyen.

He has since been replaced with Pravin Gordhan, the country's third finance minister in a week and a man who held the post between 2009 and 2014.

Despite the rebound, Questor believed the shares are not attractive.

“They remain highly exposed to weaker emerging market economies and febrile equity markets,” the pundit said.

It pointed out a large chunk of the company’s profits are generated from South Africa.

While Old Mutual has made efforts to diversify away, the doubling of South African equity markets over the past six years has driven returns.

The market there has now fallen about 17% from highs seen in August, and is now flat for the year to date.

While it is performing well, Questor said investor concern and falling equity markets led to the company reporting an £11bn fall in assets under management.

With the focus on emerging markets and what happens when US interest rates begin to rise, Questor said it was concerned about the stock, and rated it at ‘sell’.

Over in The Times, Tempus was betting that BTG will be a good long term investment.

The specialist pharmaceutical firm said yesterday it had won US regulatory approval for its LC Bead Lumi radiation treatment.

It added that a trial of its PneumRx endobronchial coil implant for severe emphysema had produced positive results with all primary and secondary endpoints of the study met.

And last week, the FDA approved Vistogard to treat overdoses of chemotherapy – the only such drug on the market worth between $25m and $35m.

Tempus said the company is trying to build up a stable of world-beating drugs as well as relying on other well-known and seasoned medications.

With the three bits of good news within the last week, Tempus said it would lead to the company become the “major, if specialist, player in global pharmaceuticals it has long promised to be”.

While shares sell on more than 30 times earnings, it said to consider the share price fall over the past year.

It recommended people ‘buy long term’, with its varicose veins treatment Varithena showing potential for the company as well.