And for me there is no room for gambling on a one-share pick.  Berkeley Group screams quality and its reputation ensures that its developments are always sold out and at a premium to other builders such as Taylor Wimpey and Barratt Developments.

Despite the reported downturn in the housing market, Berkeley Group has impressively grown revenue at an average of 28% for the last four years and earnings per share by an even more impressive 40%.  More modest growth of 6% and 11% is expected for the next couple of years, but that is still a fantastic return in the current climate. You would expect a high price for such growth, too, but the price-to-earnings ratio is just 10!

I haven’t even talked about that dividend yet.  8%! Yes, you heard me.  You want another Christmas present next year?  Just keep holding onto Berkeley Group and it’s coming early!  Sounds like Berkeley Group is an early Christmas treat to me.

More reading

Barry James has no position in any shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

But large, established companies such as Tullow often come with many interesting stories from years gone by. I’ve trawled the internet and discovered these fun facts you probably never knew about the FTSE 100 member:

Looking for oil in Africa from Ireland

Tullow is a small town about 35 miles south of Dublin, Ireland.  While local companies were exploring the North Sea and Irish Celtic Sea, Tullow Oil ventured into the small oil fields in Africa.  The major oil companies overlooked the small fields and Tullow took their chance to dive into a project in Senegal without any knowledge of the industry or any backers.

Today, Tullow is one of the largest independent exploration companies in Europe with over 140 licenses across more than 20 countries.

Isaac Newton can keep his apple

Tullow uses full tensor gradiometers that enable them to pinpoint where oil is more likely to be under the ground leading to much greater success in drilling.  Gravity gradiometry can measure the density of the subsurface, effectively the rate of change of rock properties. From this information it is possible to build a picture of anomalies under the surface, some of which will resemble oil and gas deposits.

A tough subject, maybe, but not so hard to swallow when it saves you hundreds of millions of pounds in exploration fees.

 Turtle power!

In late 2009, Tullow Oil conducted a 3D seismic survey in the Guyane Maritime licence area.  Turtles are known to nest and feed along the French Guiana coastline; Tullow entered a training programme which helped to recognise the presence of turtles during the seismic activities.

More reading

Barry does not own any shares in Tullow Oil. The Motley Fool has recommended shares in Tullow Oil.

Unilever 

So here’s a quick rundown of the key reasons why you may wish to buy, sell or simply hold on to the company’s stock.

Buy

Many Unilever bulls point to the May 2013 high of 2862p per share.  The group is still 11% off that high 16 months later.  This potential growth married with the satisfying reward of a 3.6% dividend yield is a tempting prospect for would-be investors.

Unilever still has it’s impressive moat with a huge range of over 1,000 well-known brand names worldwide with a staggering two billion people using them on any given day.  With such an established base, the group is able to continue to push into developing markets.

Hold

Despite the potential, growth so far this year has been slower than expected in emerging markets.  In Asia particularly macro-economic pressures have held back consumer spending.  It is an uncertain future in those markets right now so those who held shares would be forgiven for hunkering down a little while it plays out.

In addition to this, the first-half results highlighted that “Unilever is involved in a number of ongoing investigations by national competition authorities”.   Many investors should be wary at the potential impact of such investigations especially given the tough trading conditions.

Sell

Price is far from the whole story and Unilever is running at a price/earnings ratio of almost 20.  This is a little on the high side and although there is some scope for growth, such a large company cannot expect to shoot for the stars.  In fact the most recent annual results saw a mere 3% earnings per share growth.  This gives a price to earnings growth of 6.5 which would strike it from the list of many investors.

There are plenty of companies that exhibit greater growth potential than Unilever and it may be worthwhile searching out those instead.

More reading

The Motley Fool owns shares in Unilever.

Gross written premiums year-to-date were up 4.8% to £427.0m with motor up 4.8% and home up 4.2%.  Total in-force policies at 30 September stood at 1.906m, a rise of 8.4%.  Additional services revenue was up just 0.4% for the year-to-date at £79.3m.

Stuart Vann, Chief Executive Officer of esure Group plc, commented:

“We continue to focus on disciplined underwriting and maintaining our high customer retention rates. This is particularly reflected in the Sheilas’ Wheels book where our customers continue to see the benefits from gender-neutral pricing. We also continued cautiously to re-enter certain segments of the motor market that we exited between 2009 and 2011. ASR excluding Claims Income has grown proportionately in line with the growth in policy count and I am pleased with the initial performance of the “Just in Case” product that we launched during August. We remain on track to meet market expectations for the full year.”

Motor premiums were up 1.8% in Q3, reflecting esure Group’s decision to maintain pricing and underwriting discipline despite continuing tough market conditions. The Group has focused on retaining existing customers, with an improvement in the overall retention rate compared to Q3 2012.

The Group continues to take a cautious and conservative approach to growth in those segments of the UK motor market from which it withdrew during the personal injury phenomenon. As was indicated at the interim results in August, it is still too soon to judge the full impact of the civil justice reforms and LASPO², and the Group will continue to monitor developments.

The market has reacted well to the news with a 5% jump in the share price in early trading.  This is in contrast with the past year, which has seen esure’s share price fall by 27% in a bullish market. 

More reading

> Barry does not own shares in esure Group.

The consumer care segment saw sales up 3.2% to £145.4m with strong sales in Western Europe and North America but sales continuing to decline in Eastern Europe, Middle East and Africa.  Crop Care continued to see double digit growth in Europe. 

Performance technologies sales were up just 0.4% to £95m and the comparatively minor industrial chemicals segment continued to see strong growth with turnover increasing 31.6% to £27.5m, bolstered by the acquisition of Sipo in July 2013.

Cash generation was good in the quarter with net debt falling £8.6m to £213.7m. This was despite a £45.6m increase in borrowings due to the acquisition of 65% of the equity of Sipo in the quarter.

Commenting on the outlook, Martin Flower, Chairman of Croda said: 

“Croda has continued to generate a steadily improving underlying sales performance through every quarter of this year despite challenging market conditions. We continue to benefit from the strong demand for innovation and remain particularly encouraged by the progress that Croda is making in Asia and South America. However, with currencies continuing to weaken and market conditions expected to remain subdued, fourth quarter profits are likely to be similar to quarter three. Looking ahead, the Board remains confident that Croda’s strategy will continue to deliver progress into 2014 and beyond.”

Croda has performed well in recent years with earnings per share growth averaging 38% for 3 years until the last full set of results which saw growth slow to 8%.  This trading update suggests current year growth will be around 4% which is a concern for growth investors considering the price to earnings ratio is approaching 20 times.

The market has reacted badly initially with a 7% drop in the share price this morning.  The shares are now 15% down on the April 2013 high of 2,846 pence.  Was this an overreaction or has Croda come to the end of a growth spurt which saw a 375% gain in 5 years?  The company’s debt position is low at 8% of market capital but then the tangible assets are even lower at 4%. 

More reading

> Barry does not own shares in Croda.

Tesco (LSE: TSCO) (NASDAQOTH: TSCDY.US) seems to be one of those Marmite shares, even within the Fool offices. Nobody can agree whether it is a long-term hold with a great dividend and a newly refocused structure, or a behemoth that has come to the end of any meaningful returns for investors.

I have been in the former camp since July 2011, and it has been a pretty unsettling ride so far. The fresh optimism brought on by the start of a shiny new year in 2012 was ripped apart by a 20% drop over the first couple of weeks. As was widely known, Warren Buffett had been an admirer of Tesco for some time, owning shares since at least as far back as 2007, and his topping up in November 2011 eased my frayed nerves on the grocer’s fortunes.

When that early 2012 dip happened, I was again safely harboured in the comforting arms of Uncle Warren who was saying everything was going to be okay. Tesco’s slide was precipitated by their first profit warning for over 20 years and, rather than running for the hills, Buffett helped himself to some more to bring his holding to over 5% of the company. (Indeed, we have detailed free report on Buffett’s interest in the business. Just click here to take a look.)

Since then it has been a story of disappointment and despair for shareholders, with only the dividend (still yielding 4%) as any real consolation for beleaguered shareholders. The sale of the Fresh and Easy chain signalled surrender in the US, and re-organisation in China put a lot of pressure on European operations that have so far not delivered.

To make matters worse now Buffett has sold part of his holding..! We can argue all we like about his motivations, but one thing is clear: he does not have the faith in Tesco right now to hold on to those shares.  

When the world’s greatest individual investor’s money talks, it’s time to listen. Me, I’m beginning to think the doubters were right all along and that maybe — whisper it quietly — Buffett might have missed out this time.

Should I get out now while i have only taken a bit of a mauling and look for some new ideas like the Fool’s top growth share? Maybe, and I’m not sure my nerves can take it much longer.  Earnings per share growth is expected to be low or even negative for the next couple of years, and prices still feel high in comparison, even though the price-to-earnings ratio is hovering around 10 or 11 times.  The assets are in a strong position and Tesco is a healthy company so I could be wrong, but I may well be escaping from this horror story — and sharpish.

More reading

> Both Barry and The Motley Fool own shares in Tesco.

Like-for-like sales rose 2% with the gross transaction value of total sales rising 2.5% to £2,777m.  International sales, while smaller, at £552m grew at a more promising rate of 3.7%.  Investors keep a keen eye on Debenhams’ online sales and will be heartened to see an increase of 46% to £366m.  Indeed, online sales, now in 67 countries, accounted for 13% of total sales, up from 9% in the previous year.

Despite this modest increase in revenues, group profits before tax fell by 2.7% to £154m.  However, due to a continuation of the share buyback policy using £40m of spare cash flow the earnings per share actually increased by 4.1% to 10.2 pence.  Even with this use of surplus cash, net debt only rose by £4m to a very manageable £372m.  The directors announced a final dividend of 2.4 pence per share bringing the total dividend for the year to 3.4 pence per share, an increase of 3%.

Commenting on the results, Michael Sharp, Chief Executive, said:

“I am pleased with our performance in 2013 given the very difficult conditions.  We gained market share in key categories, demonstrating the competitiveness of our product offer.   We continue to deliver growth and additional customer benefits through our strong multi-channel capabilities. 

“At the same time, we are working hard to ensure our UK stores adapt to the challenge of their changing role in a multi-channel world…..whilst consumer confidence may be showing signs of improvement, we expect that household incomes will remain under pressure from inflation growing ahead of wages. With this in mind, we remain cautious about the strength and pace of any consumer recovery in 2014 and expect the marketplace to remain highly competitive.”

Debenhams have opened stores in Chesterfield and Lichfield and transformed their flagship Oxford Street store in a modernisation program encompassing 12 other stores so far with the remaining 19 stores over the next 2 years.  In addition to this, 16 new stores are targeted to open over the next 4 years with 4 in 2014.

Overall, Debenhams does have a good debt position and progressive dividend policy but is still to completely convince investors that its transition to the online world will result in sufficient future growth.  Earnings per share growth has not been in double digits for some years and that has held the price-to-earnings multiple down under 11 times.  Investors initial reaction is disappointment with a 7% drop in the share price, but this could present an opportunity to get in on a growth story.

With a share price rising just 10% since 2009 in a bullish market Debenhams has been left behind.  Is now the time to invest?  It is certainly worth some further investigation.

More reading

> Barry does not own shares in Debenhams. The Motley Fool has recommended shares in Debenhams.

Total revenues rose 12.4% to £1,145m although like-for-like sales grew more slowly at 2.8% for the six months to 29th August 2013.  Underlying profits before tax were lifted by 12.6% to £216m with earnings per share rising similarly to 90.92 pence for the six-month period.  With EPS growing strongly at 13% on average for the past four years, the trend is very positive from Whitbread.

The dividend is another strong card for the company, with the interim rising a further 11.8% to 21.8 pence per share. Dividend growth dropped to 5% for FY2013, so it will be a welcome relief to investors to see Whitbread pushing through a solid increase this time around.

Much of the sales growth stemmed from the expansion of the network.  Premier Inn opened 12 new hotels and 3 new joint site restaurants.  With like-for-like sales only growing by 3.3% it is this expansion that is driving the improved numbers for now.  Costa coffee shops saw 153 net new stores worldwide during the period bringing the total number above 1,000.  

Commenting on the results Andy Harrison, Chief Executive, said:

“Whitbread has delivered another good performance with double digit growth.  The combination of organic network expansion and good like for like sales growth, drove a 12.6% increase in underlying pre-tax profits.  Since the onset of the recession in 2008/9, Whitbread has grown its sales and underlying pre-tax profits by 11.1% and 12.0% per annum respectively, demonstrating the strength of the business and our leading market positions….This good first half performance puts us on track to deliver this year’s business plan and we remain on the right trajectory for our 2016 and 2018 growth milestones. Our combination of strong organic growth, good returns on capital and strong cash flow should continue to create substantial shareholder value.”

Whitbread shares are trading slightly up on the news at 3,405 pence.  The market had already priced in gains of around that level and took the results in its stride.  The company looks to be in very good shape overall, though, with a return on capital of over 14% and cash flow from operations up 7.9% to £308m which helped reduce net debt by £41m to £430m in the last six months.

The expectation from Whitbread is that the first-half performance puts it on track to meet this year’s business plan along with growth milestones for 2016 and 2018.

More reading

> Barry does not own shares in Whitbread.

Today I’m going to quickly review three figures for anyone thinking about investing in Unilever (LSE: ULVR) (NYSE: UL.US).

1.  16%

That is the fall in share price since Unilever peaked at 2,883p in May 2013.  The company has underperformed the market so far in 2013 with a gain of just 2.7% compared with a rise in the FTSE All-Share of 10.6%.

Underlying sales growth held up at around 5% and operating profits increased by 14% in Unilever’s recent half-year results, which suggests the underlying company isn’t in trouble and that there may be an opportunity to buy at a discount.

2. €1.3bn

Unilever managed to generate this in free cash flow in just six months (to June 2013).  It is a colossal number albeit down slightly from the €1.5bn reported during the previous year.

In fact, numbers across the board look decent for Unilever, with core earnings per share up 4% to €0.76 and the dividend yield increasing from 3.2% to 3.6% following the recent share-price drop.

This ability to generate cash is what allows Unilever to pay out those juicy dividends each quarter.

3. $750,000,000

That is the bond that Unilever offered on the US market on 4 September 2013.  It was a 2.2% fixed-rate bond with notes due on 6 March 2019.

With an annual turnover of over €50bn and net profits of over €2.7bn in the first half of 2013 alone, you would imagine Unilever had no need to borrow more. 

Yet net debt has risen from $7.4bn at 31 December 2012 to the $11.6bn reported at 30 June 2013 — although the main reason for this rise was the voluntary open offer needed to acquire additional shares in Hindustan Unilever Limited. 

Still, a borrowing rate of 2.2% is hard to turn down, though, and the company should be confident of being able to invest the proceeds and easily outstrip the finance costs.

What next?

So there you go, three numbers that may or may not have some bearing on whether you buy shares in Unilever.

If you are still about Unilever’s prospects, you may wish to enjoy this exclusive wealth report, which reviews the company further along with five other blue chips you can buy today.

Indeed, all five selections offer a mix of robust prospects, illustrious histories and dependable dividends, and have just been declared by the Fool as “5 Shares You Can Retire On“!

Just click here for this special report now — it’s free for a limited time only.

> Barry does not own any share mentioned in this article. The Motley Fool has recommended shares in Unilever.

More reading

The cash consideration will be reduced by any net debt transferring with the business.  Completion is expected in the fourth quarter of 2013 and is conditional on inter alia, EU competition clearance. Net cash inflow upon completion is expected to be in excess of £150 million.  The proceeds of the transaction will be used in the first instance to reduce borrowings, and over time, to fund investments.

Commenting on the sale, Andrew McNaughton, CEO of Balfour Beatty, said:

 “The sale of the UK FM business represents an important step in our evolution as we intensify our focus on infrastructure.  In addition to finding a good new home for the business, its customers and employees, this transaction has achieved good value and will enable us to allocate more resource to target growth sectors and markets in the future.”

The UK FM business has a number of major contracts in the UK, with clients including the Department for Work and Pensions, HM Revenue & Customs and North East Lincolnshire Council as well as the Romec joint venture with the Royal Mail Group, which provides a wide range of technical and building services to Royal Mail, Post Office and Parcelforce Worldwide. The business is expected to continue to provide facilities management services to Balfour Beatty’s current portfolio of social infrastructure PPP assets in the UK and to collaborate with the Group on the development of its investments in the future.

The UK FM business, the performance of which is reported within the Group’s Support Services segment, generated £482 million of revenue in 2012 with operating profit of £21m, and has over 9,000 employees. Gross assets at 31 December 2012 were £197m.

Balfour Beatty has lagged the market in the last year, dropping 17% but this could be the fillip the company needs to turn around its fortunes and spurring growth. If you are interested in finding similar potential growth opportunities take a look at this free report which could help you on your way.

The report explains how taking a contrarian view and backing unloved companies can be vital steps on the path to the magic £1,000,0000 milestone. Maybe one day, a resurgent Balfour Beatty could be the share that transforms your wealth.

Just click here to download the report today. But hurry, all Fool reports are free for a limited time only.

 > Barry does not own shares on Balfour Beatty.

More reading