Broker roundup part 2 including Aminex, New Britain Palm Oil, Admiral and Hiscox


Broker Numis is optimistic that online gaming firm bwin.party digital entertainment (LON:BPTY) will reach its share price target of 300 pence.

The shares are currently changing hands for 94.65 pence each.

"It is a long haul to our 300p price target and we need something of a following wind to get there," said analyst Ivor Jones, who rates the stock a 'buy'.

"But when we look at the performance of competitors like 888 and Paddy Power, flying high with a stable team and business, we feel optimistic that bwin.party will get there too," he added.

Jones says that 2013 should be the year that bwin.party gets back in the groove, when poker, for example, should have moved to one unified platform (from three).

In other coverage, broker Numis reckons that despite headwinds, car insurer Admiral (LON:ADM) remains a "quality underwriter".

Analyst Fahad Changazi noted that the firm reported a good set of interims yesterday and he still expects strong earnings and dividend growth.

"Importantly, claims trends remain stable, with COO David Stephens commenting that it was "increasingly looking like (2011 saw) abnormal claims experience"", noted the analyst.

Turning to other recent news, potential losses for Lloyds insurers from Hurricane Isaac in the Gulf of Mexico should not be severe enough to affect estimates this year, according to JP Morgan.

Stress testing for an extreme hurricane by the broker showed Catlin (LON:CGL) appears well placed to face a peak event, followed by Hiscox (LON:HSX), which JPM says is one of the more defensive stocks in the sector.

The broker also retains an overweight stance on Lancashire (LON:LRE), despite a high exposure to the hurricane as it says the company benefits from a high frequency low severity loss pattern.

Elsewhere, British utility SSE (LON:SSE) is a ‘buy’ as it offers investors a ‘free option’ on a recovery in the market, according to UBS’ London office.

Analyst Stephen Hunt said the group’s strong 6.4 per cent dividend helps put a floor under the share price as he upgraded the stock and set a £15.15 price target.

In the junior sector, oil explorer Aminex (LON:AEX) today hailed a breakthrough six months in which its exploration programme delivered spectacularly, and it revealed it is in the final stages of negotiating a US$15 million loan to fund further work in Tanzania.

The major development was the company’s Ntorya discovery in the Ruvuma Basin, which has unlocked 1.17 trillion cubic feet of gas, or the equivalent of 195 million barrels of oil.

Following the statement, analyst Craig Howie, of house broker Shore Capital, said:  "Aminex has a strong position in East Africa, in our opinion."

He noted that the launch of the new national pipeline project in Tanzania was expected to provide a direct route for Aminex gas by 2014.

"We continue to calculate risked NAV of 20p/share," he said.

Elsewhere, New Britain Palm Oil (LON:NBPO) is the subject of a note by Peel Hunt analyst Charles Hall.

He said the company continues to have a ‘strong and valuable’ position but investors need time to rebuild their confidence in the company following its disappointing interim results.

“There are a lot of moving parts in New Britain Palm Oil and a number of them have moved in the wrong direction at the same time,” he said in a note.

“Profits should recover next year, but to well below previous levels as a higher cost base gets baked in.” 

The extension to Global Energy Development’s $5 million loan notes helps the company improve its near term financial flexibility, said Northland Capital’s Andrew McGeary.

“The company is cash generative with low gearing and manageable borrowings. However, it is in a capital intensive phase whereby it is appraising its CHOPS development and will look to initiate shale tests on its assets located in the Magdalena valley.

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