Newspaper article The Evening Standard (London, England)

Misys Gets Merrill's Vote despite Sesame Sale Delay

Newspaper article The Evening Standard (London, England)

Misys Gets Merrill's Vote despite Sesame Sale Delay

Article excerpt


BANKING-to-healthcare software firm Misys may still be saddled with its Sesame business, but the company's shares are trading at a "significant discount to the sector" and are good value at current levels, says Merrill Lynch.

On the downside, its failure to sell Sesame, which provides support services to financial advisers, prevents the firm from transforming itself into a pure software company and re-rating to a software multiple. As a result, Merrill has trimmed its target on the stock by 50p to 250p. All the same, the broker has advised clients to buy the shares on valuation grounds.

Now is not the time to pull out of AIM-listed Vectura, a biotechnology group that has developed drug inhalers for a range of disorders including erectile dysfunction, premature ejaculation and Parkinson's disease.

That is the view of broker Canaccord Adams, which has initiated coverage with a buy recommendation. Praising the firm's " interesting clinical pipeline", the broker claims the market has undervalued Vectura. It gives the project a 35% chance of success, but estimates the market rates its chances at just 20%.

"With deal-driven news flow likely in the near term and longerterm value from a significant royalty stream, we believe that Vectura offers a very attractive blend of risk and reward at the current price," the broker says.

The tobacco sector still has some puff in it too, says Morgan Stanley, which has picked out Imperial --6% off its high in early March -as a likely winner in the next few weeks. "The group has a track record of achieving consensusbeating results, and we would advise buying ahead of first-half results on 26 April," says Morgan Stanley.

Gallaher, too, looks " interesting" - the shares are trading at a 7% discount to the sector, the broker reckons.

According to Halifax Financial Services, March was a good month on the London Stock Exchange.

The FTSE 100 delivered a rise in total shareholder return of 3.7%, while returns for FTSE 250 investors were up 4.2%.

With rising profits and the sale of its aluminium business to Aleris International for some [pounds sterling]570 million, steelmaker Corus was the best blue-chip performer with a 23% rise in total shareholder return, Halifax said. …

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