TD customers spy opportunities in sub 50p stock

RBS, Yell and Taylor Wimpey provide short-term profits despite floundering share prices. Angus Rigby, Chief Executive Officer, TD Waterhouse comments: "Overall trading activity rose again over the last seven days, with buys and sells registering an increase of 11.50% and 13% respectively compared to the previous week. Royal Bank of Scotland (RBS), Lloyds Banking Group and Barclays are still the most popular choice among our customers and continue unchallenged to hold the top positions, representing almost 59% of buys and 58% of sells of our weekly top ten charts.

"RBS takes over the top slot from Barclays in the buys table, having seen 36% more of its stock bought than sold this week. RBS, which announced on Monday its plans to cut 9,000 jobs globally in an effort to reduce costs by £2.5bn over the next three years, had seen its share price rise at the beginning of April (from 23p on 30th March to just over 30p on 3rd April). Even at these low levels there could have been the potential for some short-term profits if trades were timed correctly. However, with RBS stock hovering so close to the bank's open offer price of 31¾p, shareholders were not so keen to take up the offer. This left the Government with no other choice but to take up the unsubscribed stock and increase its stake in RBS from 58% to just over 70%.

"Meanwhile, heavily indebted Taylor Wimpey has entered our top ten at number four this week in both the buys and sells tables. The struggling house builder's share price currently stands at 46p, compared to 508p when it hit its peak two years ago, but despite these low levels the stock has in fact registered an 83% hike over the week following the successful completion of a much sought after refinancing agreement after months of negotiations with the banks. The continuing downturn of the British housing market may have seen the house builder's share value plunge but Tuesday's deal should ‘give the group flexibility to enable it to trade through the current downturn' according to CEO Pete Redfern.

"Finally, another new entry this week at number five and number eight of our buys and sells tables respectively, is the directory inquiries firm Yell Group. Last Friday the company's share price leapt a massive 42%, to 21.25p, on the back of rumours that the group was mulling the appointment of restructuring advisors in four to six weeks in order to help renegotiate terms for its £4.3bn debt burden, while a possible sale of its overseas businesses may help pay the rest of it down. ABN Amro analyst Paul Gooden says this is an aggressive short covering and a clear sign of how tough market conditions are at the moment, seeing as Yell only just renegotiated its covenants last October."