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[January 25, 2013]
Daily Mail, London, market report column
Jan 25, 2013 (Daily Mail - McClatchy-Tribune Information Services via COMTEX) -- MANY city dealers didn't know hedge fund manager David Einhorn from a bar of soap until yesterday.
He works for Greenlight Capital and is widely followed on Wall Street.
So when he said in a newsletter to investors that the market undervalues Vodafone's "clearly quite valuable" 45pc stake in Verizon Wireless, and that it could soon sell its shareholding, buyers chased shares of the world's second biggest telecoms company up to 168.65p before they closed 5.2p better at 168.675p on turnover of 233m.
Einhorn added further spice, citing the "huge valuation disparity between what the market thinks Verizon Wireless is worth to Verizon -- at least a couple of hundred billion dollars -- and what it ascribes to Vodafone -- about zero." "Combined with Verizon's increasing dependence on Verizon Wireless, it wouldn't be a surprise if Verizon decided to buy all of Vodafone to gain full ownership of Verizon Wireless," he said.
Einhorn's remarks coincided with some bullish broker notes on Vodafone ahead of the group's third-quarter update on February 7. Espirito Santo Investment Bank is a buyer and has a fair valuation target price of pounds sterling 2.
The heavily weighted Vodafone provided 17 points of the Footsie's 67.27 point leap to 6,264.91, its highest level since May 2008. The FTSE 250, which is considered by many to be a better barometer of the UK economy, sailed through the magic 13,000 level to finish 132.04 points up at a record 13,066.44.
Wall Street, which had closed at its highest level since October 2007 on Wednesday, improved a further 46 points to 13,825.33 yesterday after US weekly jobless claims unexpectedly fell to a five-year low.
United Utilities, Britain's largest listed water company, formed in 1995 via the merger of North West Water and NORWEB, touched 749p before closing 30p better at 747.5p. Broker Bank of America/Merrill Lynch upgraded to neutral from underperform, but punters were more excited by revived bid talk.
Rumours were again rife that an international infrastructure consortium including Ontario Teachers, the Canadian pension fund, and Qatari and Abu Dhabi funds, is ready to roll-out a break-up cash bid for UU which would value the Warrington-based group at pounds sterling 6.5bn, or 950p a share.
Chip maker ARM Holdings was sold down to 832p in sympathy with Apple's disappointing figures but recovered on a regurgitation of old Intel bid talk to finish 18p higher at 867.5p.
Recovery hopes lifted CPP Group 2p more to 20.38p. Shares of the credit card insurer have rallied from the depressed level of 3.37p which followed the record pounds sterling 10.5m fine handed down by the authorities for mis-selling.
London & Stamford Property rose 7.1p to 117.1p following its merger with Metric Property Investments.
Tony O'Reilly Junior's Providence Resources advanced 7p to 658p following a bullish update on its licences in the Rathlin Basin, offshore Northern Ireland. This follows the successful appraisal of the Barryroe oil field in 2012.
Sellers dragged Gold Oil 1.44p or 48pc lower to 1.54p after the shares returned from suspension following a seven month freeze. The company said it has made progress on plans to raise additional capital, and expects to update shareholders early in 2013. Strategy remains focused on Latin America, stabilising production and consolidating holdings in its Nancy-Burdine Field in Colombia.
David Cicurel's Judges Scientific jumped 28.5p to a record 1015p following an upbeat pre-close trading update. It maintained momentum in sales, profit and cash flow last year. Broker WH Ireland has a target price of pounds sterling 11 and says the current price continues to represent a compelling entry point for this export focused UK manufacturer of high margin scientific instruments.
Clinical software provider Emis shed 150p or 16.67pc to 750p after warning operating profits will fall short of expectations. The supplier of services to GP surgeries and other healthcare practitioners said the shortfall was largely due to accelerated staff and recruitment costs associated with the Emis roll out and slight revenue shortfalls.
Park Plaza hotel operator PPHE rose 13.5p to 270p as buyers checked in following a positive trading update. Broker Investec lifted its target price to 380p from 350p, saying it reflected revenue ahead of expectations, assisted by a strong London performance.
A positive trading update lifted Burford Capital 4.5p to 100.5p. One of the world's largest providers of litigation funding revealed a record year for investment recoveries and significant progress in its investment portfolio.
(ASTERISK)(ASTERISK)(ASTERISK) FUEL cell energy company AFC Energy, which has Chelsea FC owner Roman Abramovich as a major 15pc shareholder, jumped 10pc to 33.25p. Buyers piled in on hearing that its electrodes have achieved six months of longevity at its laboratories in Surrey. They have generated clean electricity for at least six months without failing. Chief executive Ian Williamson is currently in Korea drumming up interest in the Far East.
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