LONDON TIMES: One cockroach means more...: “I am holding BG Group, ENI, Premier Oil, Schlumberger, and yes, also Shell, which is on its mettle to replace depleted reserves and to retrieve its reputation as a solid — as opposed to stodgy — powerhouse with a strong recovery potential.” (ShellNews.net) 2 April 05
SHARES OF THE MONTH
By Stella Shamoon
April 02, 2005
THE soaring price of oil, fears of higher US interest rates, and selling before the end of the tax year on April 5, has hit stock markets. Liquidity is focused in the energy sector with good, bad and ugly shares all rising as oil simmers at more than $55 (£29) a barrel.
I am holding BG Group, ENI, Premier Oil, Schlumberger, and yes, also Shell, which is on its mettle to replace depleted reserves and to retrieve its reputation as a solid — as opposed to stodgy — powerhouse with a strong recovery potential.
I am also holding tight to my shares in Merrill Lynch New Energy Technology, which are a stake in essential and emerging businesses around the world that offer solutions to the problems of fossil fuels.
Hank Greenberg has been ousted as chief executive of American International Group (AIG) and is stepping down as non-executive chairman after investigations into the insurer’s relationship with associated companies.
AIG’s own lawyers told regulators they have found evidence that AIG gave misleading information to investors, the US Securities and Exchange Commission and the New York State Insurance Department.
Warren Buffett’s Berkshire Hathaway is implicated in a transaction with AIG that is the focus of the inquiry.
However, Mr Greenberg was not a one-man show at AIG. I am holding the shares, given the group’s global footprint, not least, in China. The company has lost its triple-A rating, but its balance sheet is solid.
Capital & Regional’s 2004 results were bumper, proving that the nation shops on.
The company co-invests in shopping centres, retail parks and entertainment complexes, which it manages in return for lucrative fees. While its shares are no longer at a discount to the net asset value, I am holding onto Capital & Regional, along with shares of Peel Hotels and De Vere, whose freehold properties are undervalued. The recent frenzied activity in sale and leaseback to unlock the market value of freehold property within businesses, such as hotels and retailers, should put a premium on businesses full of freehold and long leasehold assets, such as Peel and De Vere. If push comes to shove, they could sell and lease back their property, raising cash. This could then make them takeover targets.
However, I am selling shares in William Morrison, the supermarket, whose purchase of Safeway has proved more problematic.
As the old market adage goes “when you spot one cockroach, there are bound to be many more”. I am out of there.
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