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Thursday tips round-up: Balfour Beatty, Virgin Media, Interserve
Thu, 09 Feb, 2012
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Thursday tips round-up: Balfour Beatty, Virgin Media, Interserve
Thu, 12 Aug 2010, 05:17:00
Balfour Beatty
seems too good to be true. In a construction and contractor sector best described as struggling, thanks to the Government's determination to introduce swingeing cuts, Balfour is going great guns. The Independent doesn't like the construction and infrastructure sector, and that's the Government's fault. But it does like Balfour Beatty. Buy.
Virgin Media
still labours under its debts, yet this is no longer the investment risk it once was because none fall due in the next five years. The business is also highly operationally geared, with a rise in top line revenues of 7 per cent increasing free cash flow by a chunky 37 per cent. The company was confident enough to launch a surprise £700m capital return to its shareholders last month, which prompted a series of analyst upgrades. In the current market for broadband and pay TV, the sure financial footing gives the Independent confidence to recommend a buy.
Interserve
, once a predictable British engineering company in the mould of Balfour Beatty or Amec, has transformed itself over the past decade into a multi-faceted outsourcing services provider. Analysts were divided over whether the company's lowly rating of 5.6 times 2010 forecasts and its 8.6 per cent yield merited a buying opportunity especially as the company needs to find a new finance director. Yet with shares trading at almost exactly half the 2006 peak of 420p, a re-rating looks overdue. Buy, says the Times. Last week's interim profit from
RSA Insurance
was flat year-on-year, following claims related to extreme weather and the Chilean earthquake earlier this year. Of course, as with any insurer, profits can be hit by major catastrophic events such as the floods in Pakistan. RSA's shares are trading on a December 2010 earnings multiple of 10.2 times, falling to 9.4 next year. Buy for the income, says the Telegraph.
Grainger
trades at a 40 per cent discount to its forecast adjusted net asset value for the year to September. Despite an uncertain outlook for the UK housing market - further house price falls are likely given constrained lending from banks and building societies - that sort of value is an opportunity not to be missed. Buy, says the Independent. Europe's biggest tour operator hit turbulence as it gave warning that full-year results would come in at the lower end of expectations, largely because of currency issues and softer trading in Britain.
TUI Travel
's woes included the ash cloud crisis, austerity measures arising from the emergency Budget, the World Cup and the hot summer weather, all of which combined to keep holidaymakers at home. The 10 per cent fall in the shares down 22½p to 203.1p could also prompt TUI, the German shipping group that owns 54 per cent of the shares, to pounce on the rest. Hold, says the Times. With telecoms equipment products that are mind-numbingly difficult to comprehend and shares as volatile as a hospital heart monitor,
BATM Advanced Communications
is a throwback to the days of the tech boom. The shares trade at a whopping 59 times KBC Peel Hunt's earnings forecasts for the year, but traditional valuation metrics rarely paint an accurate picture for high-tech stocks. Nevertheless, BATM looks risky at this level so hold on for more clarity, says 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:
Questor : Cape
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Telegraph
Questor share tip: RSA Insurance
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Telegraph
Investment Column : Balfour Beatty
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The Independent
Investment Column : Grainger
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The Independent
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