| CATEGORY: TIPS ROUND-UP SECTOR: INDUSTRIAL ENGINEERING |
Wednesday tips round-up: Miners, G4S, Vitec |
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Wed 05 May 2010
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LONDON (SHARECAST) - Australia has just become the world's most-taxed mining economy after introducing a 40% super-tax. It will hit mining groups hard, but earnings were about to expand strongly anyway. Although a setback, there should still be enough profit to go around suggests the Telegraph.
By far the most exposed is BHP, which has 51% of its assets in the country. Rio Tinto has 35% of its assets in Australia and New Zealand, while for Xstrata this figure is 33%. Among the four main mining groups, Anglo American is least exposed but it does have a significant Australian coal business. The Telegraph says buy Rio Tinto, BHP Billiton and Anglo American and hold Xstrata.
Broadcast peripherals group Vitec plays a behind-the scenes role in most big media events, and general elections are no exception. At 410p, Vitec — whose net debt has fallen to £40m — trades at 11 times 2010 earnings and yields a prospective 4.5 per cent. Buy says the Times.
Gold prices have risen 10% over the past three months but shares in Avocet Mining, an AIM-listed producer of the yellow metal, have done somewhat better — up 40% since February. Avocet’s higher-cost mines in Malaysia and Indonesia, which produce 100,000 ounces a year, are performing to plan, but the longer-term hope is that they will be divested, leaving the company a pure West African play. At 120p, hold on says the Times.
If you want a stock that is both defensive and offers the prospect of growth, then you can do a lot worse than G4S, the security services group which issued what one broker described as an "extremely solid" update yesterday. G4S still trades on a multiple of just 12.7 times broker estimates for 2010. That falls to below 12 times when you factor in the broker's numbers for 2011. There is also a prospective yield of almost 3% this year. Buy says the Independent.
The Times adds that 12 times 2010 earnings and a 3% yield is a reasonable price for G4S, a company that will benefit from rising GDP and that draws three quarters of sales from overseas. Hold.
Local newspaper group Johnston Press’s digital revenues grew in the fourth quarter and it will benefit from a recovery in the advertising markets that is predicted for the first half at least. Yet even though brokers put the company's price at a discount to the industry of 6.7 times estimated 2010 earnings in March, there remains a lack of clarity over earnings in the longer term, and the share price has tripled in a year. A hold for now says the Independent.
If you have doubts about the economy, then recruiter Michael Page is not for you. There is an argument that says the shares have run their race for now, and at 38 times this year's earnings they are hardly cheap (although that falls rapidly over the next couple of years). But they will repay long-term investors with Michael Page offering the most upside in its sector. Buy says the Independent.
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| VTC - Vitec Group |
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| Latest Prices |
| Name |
Price |
% |
| Vitec Group |
439.25p |
-1.29% |
| G4S |
256.30p |
+0.55% |
| Michael Page International |
431.60p |
+2.86% |
| JPMorgan Japan Smaller Companies Trust |
132.75p |
0.00% |
| Avocet Mining |
131.00p |
+2.14% |
| Rio Tinto |
3,529.50p |
+1.70% |
| BHP Billiton |
1,926.00p |
+1.90% |
| Xstrata |
1,138.50p |
+3.31% |
| Anglo American |
2,532.00p |
+1.32% |
| |
| FTSE 100 |
5,494 |
+1.19% |
| FTSE 250 |
10,326 |
+1.07% |
| FTSE 350 |
2,898 |
+1.17% |
| FTSE AIM 100 |
3,333 |
+1.54% |
| FTSE AIM 50 |
2,964 |
+1.03% |
| FTSE AIM All-Share |
726 |
+1.15% |
| FTSE All-Share |
2,834 |
+1.14% |
| FTSE Small Cap |
2,861 |
-0.03% |
| FTSEurofirst 300 |
1,082 |
+0.96% |
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