Sunday share tips: Central Asia Metals, Secure Trust Bank
The Sunday Times's Lucy Tobin believed that readers should 'buy' shares of Central Asia Metals, the copper miner.
Banks
4,870.34
12:54 24/12/24
Central Asia Metals
156.00p
12:35 24/12/24
FTSE AIM 100
3,464.93
13:14 24/12/24
FTSE AIM 50
3,897.43
13:14 24/12/24
FTSE AIM All-Share
717.40
13:14 24/12/24
FTSE All-Share
4,449.61
13:14 24/12/24
FTSE Small Cap
6,846.22
12:49 24/12/24
Mining
10,237.67
12:54 24/12/24
Secure Trust Bank
352.00p
13:09 24/12/24
Higher costs and investment since 2022 had hit its performance, alongside the tumbling price of copper.
But production costs were low overall and the miner had good cashflow, a strong balance sheet, zero debt and decent dividends.
And the long-term outlook for copper prices was good, given its vital role in electric vehicle manufacturing and decarbonisation initiatives.
On top of that, trading on just 6.2 times earnings, the shares looked "oversold", said Tobin.
The company's stated deal-making ambitions might be one reason for investors' "sniffiness", she noted.
Yet analyst Peter Mallin-Jones at Peel Hunt believed that the company's cash position underpinned its payout and opened up options for strategic acquisitions.
For his part, Richard Hatch at Berenberg judged that the miner was "among the lowest-risk, highest-yielding stocks of our coverage, yet it remains overlooked from a valuation standpoint. We would encourage investors to revisit the investment case of this quality name."
'Buy', said Tobin.
The Financial Mail on Sunday's Midas column recommended shares of Secure Trust Bank to its readers.
The lender's shares had more than halved over roughly the past year, but the tipster believed that was a "poor reflection of current trading and future prospects".
Midas also believed that Secure Trust Bank's interims that were due out over the coming week would likely prove "encouraging".
Indeed, brokers in the City were anticipating a 13% jump in full-year profits to reach £44m with a further improvement to £53m anticipated in 2024.
Furthermore, the business had grown and costs streamlined.
"Banks may be unloved right now but Secure Trust is a rather different animal and David Creadie is determined to make his mark," Midas said.
"The shares are a buy and the 7.5 per cent dividend yield is an added attraction."