| CATEGORY: TIPS ROUND-UP SECTOR: FIXED LINE TELECOMMUNICATIONS |
Friday tips round-up: Cable & Wireless, RSA, Invensys |
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Fri 25 May 2007
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LONDON (SHARECAST) - Cable & Wireless has a lot to prove in executing the next stage of its recovery plan, says the Independent.
The potential loss of a key wholesale deal with Pipex - the telecoms and internet company in talks with Tiscali - could prove a big blow for the company. With the stock trading at over 27 times expected earnings for next year, investors should bank their profits, says the paper.
The Telegraph adds that on a price-earnings ratio of 18½ times to 2009, and with a yield of almost 6%, there's plenty of reason to hang on while the story unfolds.
After a recent strong run, Royal Sun Alliance now looks more fully priced, and the stock is unlikely to maintain such a rapid momentum going forward.
Nevertheless, the company is in good shape after its recent overhaul. Its More Than retail business continues to exceed expectations, while the commercial arm is still profitable at a difficult stage in the cycle. Existing shareholders who have enjoyed the ride should lock in some profits, but then sit tight says the Independent.
What makes Aim-listed LED specialist Enfis unique is that its proprietary technology allows its diodes to change to virtually any colour in the spectrum - a staggering four billion combinations.
Enfis is not expected to make a profit until the late 2008 at best. So, not one for widows and orphans, but one for brave investors willing to take another look at technology says the Independent.
At 12 times 2009 earnings forecasts, against its sector’s 13 times, engineer Invensys clearly wears the past in its rating. But with earnings forecasts on the rise, and Invensys’s core markets – energy, power and rail – now showing signs of nearing their peak, there is every reason to hold on for now says the Times.
Fund manager New Star trades on 14 times forecast 2008 earnings, against its sector’s 15 times. With a move from AIM to the main market and a £363m return of capital due next month, that discount seems odd. All the more so given that John Duffield, the chairman who has fostered New Star’s talent so well, shows no sign of moving on. Hold says the Times.
There are not many companies that see their profit forecasts raised four times in five months. Such is the case at RPS, the £730m group that, as Britain’s biggest environmental consultancy, sits in one of the fastest-growing niches within support services.
At 25 times 2008 earnings forecasts, much of that potential is built into the shares. But while RPS has a relatively short order book, its high proportion of recurring revenues makes it one of the least cyclical stocks in its sector. With this week’s Planning and Energy White Papers only playing to its strengths, the shares have further to go says the Times.
Barclays' respected management can be expected to drive more profits out of ABN, while benefiting from its best-in-class payments systems. The merged group would earn a quarter of its revenues from fast-growing developing economies, as well.
If Barclays wins ABN and integrates it successfully, the bank should have secured itself a long and strong future. If not, the shares will fillip anyway. Buy says the Telegraph.
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.
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