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Friday tips round-up: BG, Imperial Tobacco, Capita
Mon, 01 Dec, 2008
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Friday tips round-up: BG, Imperial Tobacco, Capita
Fri, 25 Jul 2008, 05:45:00
More Chart Options
Related Market Prices
Name
Value
Percent
Change
BG Group
851.50p
-7.45%
BSS Group
221.75p
-4.73%
Imperial Tobacco Group
1579.00p
-2.41%
Kingfisher
110.60p
-7.45%
Misys
93.50p
-3.36%
Probability
43.00p
-0.00%
Capita Group
659.00p
-5.52%
Braemar Group
1.75p
+0.00%
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Apart from oil prices,
BG
's shares are likely to remain susceptible to the near-term production outlook - notably the development of the next phase of the Karachaganak field in Kazakhstan - and the progress of its hostile A$14 billion (£6.7 billion) bid for Australia's Origin Energy.
However, at ten times 2008 forecasts and earnings set to grow at double digits, BG is now in the territory where it could become a target itself. Buy at £10.68, writes the Times.
A heavily discounted £5bn cash call in May helped fund
Imperial Tobacco
's purchase of Altadis, its French-Spanish rival, best known for Gauloises and Fortuna, which is bedding in well. Major restructuring involving the loss of 2,440 jobs and closure of six factories, will deliver hefty savings by 2010. Selling on 13 times expected earnings, the shares look fairly valued. Hold, says the Independent.
At 20 times current-year earnings,
Capita
's shares may find it hard to appeal to first-time buyers, given the premium to peers. However, long-term contracted revenues linked to inflation and annual forecast earnings growth of nearly 20 per cent over the next two years give ample reason to hold on at 670p, writes the Times.
The Independent says that Capita has proved remarkably resilient during the recent market falls and is likely to be an early beneficiary of any improvement in sentiment. Buy.
The Telegraph writes that Capita is not cheap on 17 times next year's earnings with a 2.6pc dividend yield. But if you must play the stock market now, it's about as safe as they come. Buy.
Misys
is a different company from two years ago. Now it is more outward looking, has new products and is innovating. Emerging markets are robust and the merger with Allscripts gives it the scale to attack the fragmented US healthcare market. So far this progress has not been reflected in the company's share price, with the stock down 30 per cent in the past year, says the FT.
In current conditions, the UK market is currently out of love with most software companies. But it also reflects that the hard part of execution remains and that Misys could not offer any more details on its complex Allscripts deal until the regulatory filings are complete some time in the autumn. The shares trade a full-year 2009 price earnings ratio of 14.4 times, which reflects the market's concerns but little of the potential earnings upside from its turnround.
Kingfisher
's shares trade at about 11 times prospective earnings, a slight premium to the sector. But with analysts putting little faith in even short-term earnings forecasts because of the opaque economic environment, such metrics are of questionable use. This is a turnround story and investors should decide whether they have faith in chief executive Ian Cheshire's ability to deliver a better sales mix, cost-cutting and improved central purchasing. Delivering a successful recovery in this environment would, however, test the ability of any board, says the FT.
AIM-listed
Probability
spends heavily, attracting customers using advertisements on Vodafone and other networks. All players are vetted to ensure no one is under age. The company's profile was greatly enhanced when Michael Spencer, the boss of inter broker dealer ICAP, took a near 16 per cent stake at 50p a share, although they are now back to 46p. A speculative buy, says the Independent.
At 277¼p,
BSS
shares have fallen 28 per cent since May, to less than eight times forward earnings. With little likely to change that mood, BSS is best avoided, according to the Times.
Please note: Digital Look provides a round-up of news, tips and information that is impacting share prices and the market. Digital Look cannot take any responsibility for information provided by third parties. This is for your general information only as not intended to be relied upon by users in making an investment decision or any other decision. Please obtain a copy of the relevant publication and carry out your own research before considering acting on any of this information.
Related Newspaper Articles:
The Investment Column: Capita
-
The Independent
The Investment Column:Probability
-
The Independent
The Investment Column:Imperial Tobacco
-
The Independent
Tempus:BG Group
-
Times
Tempus:Capita Group
-
Times
Questor:BG Group
-
Telegraph
Questor:Capita Group
-
Telegraph
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