Wednesday newspaper share tips: Take a long drag of Imperial Tobacco

On Tuesday, the company posted a rise in pre-tax profit and underlying tobacco net revenue for the year ended 30 September and said it was well placed to meet expectations for the coming year, despite a drop in overall revenues.

However Tempus noted there are two warning signs ahead – the expiry of a standstill agreement between the company’s newly purchased US brands and their former owners, as well as the possible introduction of plain packaging in the UK.

However it noted the company can now put a bit more effort behind neglected brands including Winston and Kool, and the plain packaging law could benefit the company as smokers may go for the Imperial’s cheapest cigarettes when they all look the same.

But Tempus said that it’s certain that dividends will continue to grow around 10%, supported by cost savings. For that reason, it’s a good long term buy.

Over in The Telegraph, Questor is focusing on Weir Group, which manufactures industrial valves for the oil and gas sector and pumps for the mining industry.

The company said on Tuesday it expects full-year earnings to be broadly in line with current market consensus, and also announced further job losses as part of its cost-cutting plans.

Despite that, the shares rose on the news, which Questor claimed was more due to investor relief that there was no profit warning more than anything else. With orders for equipment in the oil and gas division down but the company’s minerals division more resilient, Weir responded by cutting costs.

While Weir has been under the pump to combat the slowdown in the commodity market, Questor said the share could be approaching the bottom now and it’s worth holding on to.