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Authoritative Independent Monthly Share Selections Using Technical & Fundamental Analysis

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Southern Cross - Blackstone exit triggers re-rating

April 2007

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

  • Epic Code:
  • SCHE
  • Price:
  • 424p
Two items of positive newsflow sent shares in care home operator Southern Cross rocketing to a new high of 424p, over £1 more than last November’s main write-up price of 303p. The first item was the acquisition of another 23 care homes from Life Style Care, adding another 1,737 beds, expanding the portfolio to 31,107 spread across 611 homes. When combined with previous in-fill acquisitions, this takes the total new beds added this year to 2,932, far in excess of management’s annual target of 1,200! Broker UBS believes this latest acquisition, which came at a nominal cost, enhances earnings by 5% this year and 8% in 2008, with the new earnings forecasts being 17.3p and 20.9p respectively. The broker has ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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