One to Watch

THE first-quarter update from Standard Life made pleasant reading and the accompanying outlook statement was positive. Not surprisingly, the share price moved higher on the day of the announcement.

Valuing the shares of a life assurance company can quickly become complicated given the wide range of techniques used. Throw in the ever changing regulatory landscape and the task of valuing and forecasting becomes even harder.

However, the shares offer a generous gross dividend yield of 6 per cent, which is forecast to increase and are trading on a free cash flow yield of about 9 per cent. The IFRS earning multiple is about 12x, which is relatively expensive for the sector, but the operating performance should benefit if markets continue to recover.

The pensions and savings industry is competitive and a feature of the market this year has been the return of merger and acquisition activity. I consider the shares already are attractive in their own right, but perhaps this will be the year that we see further consolidation in the sector.

The value of your investments may fall and you may get back less than you invested. This does not constitute investment advice and you should take professional advice regarding the suitability of this company for your portfolio.

J D Wetherspoon

543.5p +2.5p

Broker says BUY

AHEAD of today's third quarter interim management statement, KBC Peel Hunt has reiterated its "buy" recommendation on pubs group J D Wetherspoon.

KBC said: "We expect the positive momentum since the refinancing to get a boost from good third-quarter trading numbers and buoyant site acquisition activity."

2,257p -38p

Broker says SELL

EXECUTION Noble has cut its recommendation on clothing retailer Next from "hold" to "sell", while keeping its 2,000p target price. Analyst Caroline Gulliver said: "Next is one of our favourite companies, but following the stock's recent strong run we are recommending investors take profits."