Shares digital

Chief executive Simon Embley and finance director David Newnes have bought a further 80,000 shares in LSL Property Services (LSL). This was the third time both have bought shares this month. They have both acquired an additional 160,000 shares since LSL produced its 2007 results at the end of February. Embley now owns 7.7% of the equity and Newnes 5.3%.

The group’s fortunes are linked to those of the housing market. The group has two main profit streams – surveying and valuation and estate agency. The surveying division is by far the more important, generating 72% of group profits, having won contracts with Barclays and Cheltenham and Gloucester last year. In the final quarter of 2007 its profits were more ‘resilient’ than the estate agency’s. But the company retrenched last year to reduce the impact of the housing downturn on profitability.

Despite this, both house brokers – Numis and ABN-Amro – forecast a decline in earnings this year. But both anticipate a sharp recovery next year. Phil Lindsey of ABN believes earnings will recover to 21.9p then. Collette Ord of Numis is forecasting EPS of 24.3p The shares are selling even on a cautious 2009 PE of just six, with an attractive forward yield of 5.2%.

Shares says: Sentiment is improving and the shares look oversold.