Capita tipped for revival
Investors were urged to buy into outsourcing group Capita, as stockbroker Bridgewell predicted its order book will pick up over the next year.
"We look at the key aspects of order book, trading and margins on which news flow on Capita is invariably centred," Bridgewell said following last Thursday's interim results.
"We conclude that on each metric the story remains unchanged, and that the recent price fall presents a clear opportunity to buy into a cash-generative market leader."
Capita revealed that its order book dropped from £3.8bn in February to £3.4bn, as nine key contracts were deferred. Bridgewell said the halted bids " are unusual and, we believe, exceptional."
It explained the drop was partly due to merger and acquisition activity in the insurance sector "which will not derail the trend to outsource in the long run". As Insurance Times went to press,
Capita was trading at around 368p.
Dealers also pored over interim figures from Legal & General, trading at around 115p. JP Morgan gave the insurer an underweight recommendation, saying the stock looks expensive. "We would switch into Aviva, or Royal & SunAlliance".
Aviva is worth 658p a share and Royal & SunAlliance is at 90p.
' Yvette Essen is stock market reporter and insurance correspondent for
The Daily Telegraph