Should I Buy These Shares?

LONDON -- I've been popping stocks into my shopping basket in recent weeks and it's time I took one or two to the checkout. Here are five tempting stocks from April. Should I buy any of them?

Credit-reference agency Experian has plenty of data on you, but how do its numbers stack up?

In April, I was impressed by the group's sturdy revenue growth, both in the troubled West and expanding emerging markets, and a 222% rise in its share price over five years.

Its full-year results, published in May, showed a 7% rise in earnings before interest and tax to $1.25 billion, and a healthy 10% rise in revenues to $4.7 billion.

Net debt did rise from $1.92 billion to $2.9 billion, as the group bought a further a stake in Brazilian firm Serasa to secure its growth in the country. Experian is also expanding into new markets, notably Turkey, Colombia, Russia, and Chile.

But the market cap isn't cheap, trading at more than 21 times earnings despite a 7% drop in the share price in recent weeks. Nonetheless, Experian's global expansion prospects and forecast earnings per share (EPS) growth of 13% to March 2014 and 10% to 2015 make the company a solid prospect.

Experian looks positively cheap against unsung FTSE 100 hero Intertek , which traded at a whopping 26 times earnings in April.

Yet shares in this quality and safety services specialist have fallen 12% since mid-May, after a downbeat first-quarter statement revealed tougher trading conditions for its commodities business, with a surprise fall in minerals-related revenue.

The slide is expected to continue for some time. Falling profit margins and a 5.7 million pound rise in financing costs, to 26.7 million pounds, overshadowed a 9.9% rise in group revenue and a 22% rise in total dividend payment for 2012.

Management remains positive, claiming Intertek will continue to drive growth through "organic investment, new services and innovation, and value-adding acquisitions."

But I don't like nasty surprises, especially from a company now valued at 23 times earnings, and yielding just 1.3%, against 12.6% and 3.6% for the FTSE 100 as a whole.

ITV looked essential viewing in April, and has shrugged off stumbling markets to climb another 5% since then.

Yet the broadcaster's first-quarter statement was a bit of a turn-off, with management cautious about television advertising income and a 5% drop in revenues at ITV Studios. With no big football tournament this summer, this year is likely to disappoint.

Management nevertheless hailed a good start to 2013, as ITV outperformed its rivals in the TV ad market. The group is also busily boosting other sources of revenue, including its online, pay, and interactive businesses, as part of chief executive Adam Crozier's five-year transformation plan.

At 14.6 times earnings and yielding 1.9%, ITV is slightly pricier than the index. Does future growth justify that? EPS growth looks promising, at 10% this year and 7% for 2014, putting the dividend yield on a progressive 3.2% by then (the final dividend was hiked 62% in 2012).

Plus there is next year's World Cup to look forward to.

Eurasian Natural Resources Corporation
Eurasian Natural Resources Corporation is the craziest badass in the FTSE 100.

This Kazakhstani metals and mining company has been called "more Soviet than City," although it often looks more Marx Brothers than Marx (the Serious Fraud Office is trying to decide which).

Even the group's attempts to diversify look dangerous, as it boldly goes into the troubled Democratic Republic of Congo and Zimbabwe.

Its share-price performance is consistently atrocious, down 77% over three years, down 42% over one year and down 33% over three months. ENRC is for gamblers, especially with the three founder "Soviet" members battling to seal a 1.6 billion pound buyout before a (recently extended) deadline of June 24.

UBS still rates this stock a buy, although the broker cut its target price from 3.20 pounds to 2.85 pounds. If you're feeling brave, you can get the shares for 2.40 pounds today. Tomorrow's share price is anybody's guess. How brave are you?

I rated Serco in April, and I rate it today. In between, this hospital and prison outsourcing group has published an upbeat management statement, celebrating new contract wins and "a good operational performance across our activities around the world."

The group's 19.1 billion pound order book and estimated 31 billion pound pipeline of "identified opportunities" gives off a strong sense of security. So does its global reach, with strong growth in Africa, the Middle East, and Asia offsetting a recent slowdown in America due largely to government spending cuts.

At 14.1 times earnings, Serco's rating is a little above the market average. The yield is a measly 1.7%, but cover of 4.2 times and a 20% payout hike in 2012 points to future progression. Yet the share has gone nowhere fast in the last five years, and I'm also worried about the firm's exposure to the public sector, with government spending under pressure.

I'm watching, but I'm not buying.

Anyway, there are more exciting growth opportunities out there.

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Harvey Jones doesn't own any of the shares mentioned in this article, and neither does The Motley Fool. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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