One stock returning to dividends and one ‘rare earth’ share

Two companies, worlds apart, but both worth analysis and consideration.

STV Group & Premier African Minerals

Scottish Television Group (LSE:STVG) is often regarded as a bit of a joke north of the border. But it has reinstated its dividend, so perhaps is worthy of some consideration.

It has just announced a massive fall in profits and revenue too. By reinstating its dividend, the company is broadcasting optimism for the future and do suggest it has big plans for the next few years.

Presently trading around 336p, the share price needs to better 349 to give hope for price improvements. Growth to an initial 382p looks possible with secondary, if exceeded, at 441p.

Quite a few shares are making attempts at pre-Covid-19 highs from 2020 and, we note, our secondary calculation rather neatly challenges such an ambition, making it believable.

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Presently trading around 336p, the share price needs to better 349 to give hope for price improvements. Growth to an initial 382p looks possible with secondary, if exceeded, at 441p.

Quite a few shares are making attempts at pre-Covid-19 highs from 2020 and, we note, our secondary calculation rather neatly challenges such an ambition, making it believable.

The magic words ‘rare earths' tend to make us pay attention but until Premier African Minerals (LSE:PREM)started to be the focus of emailed questions, we'd never paid them attention.

Of course, we're always a bit suspicious of shares trading for less than a penny, due to the frequent casualty rates, but something about price movements in recent days caught our attention.

At present, trading at 0.366p, the share has to exceed 0.496p to give hope for continued gains.

Obviously, shares of this price can suffer mercilessly from the bid-offer spread. For instance, on Tuesday the price was reported as down 7.8%, but the number becomes meaningless with an offered spread of 10.3%.

This creates the unpleasant notion where any price movement needs to be large in percentage terms before any profit is made. And it gets worse, if factoring in the cost of dealing the trade.

Above 0.496p certainly has some potential, allowing growth toward an initial 0.577p with secondary, if bettered, working out at 0.764p. Importantly, and amazingly, by achieving our initial target, the share will find itself in a region which permits longer-term traffic toward 0.99p and perhaps beyond.

We cannot calculate any drop potentials against this share. Since 2016 it has been trading in a region where all drop targets must be prefaced with a minus sign.

Source: Trends and Targets. Past performance is not a guide to future performance

Alistair Strang has led high-profile and "top secret" software projects since the late 1970s and won the original John Logie Baird Award for inventors and innovators. After the financial crash, he wanted to know "how it worked" with a view to mimicking existing trading formulas and predicting what was coming next. His results speak for themselves as he continually refines the methodology.

Alistair Strang is a freelance contributor and not a direct employee of Interactive Investor. All correspondence is with Alistair Strang, who for these purposes is deemed a third-party supplier. Buying, selling and investing in shares is not without risk. Market and company movement will affect your performance and you may get back less than you invest. Neither Alistair Strang or Interactive Investor will be responsible for any losses that may be incurred as a result of following a trading idea.