Broker tips: ARM, Inchcape, Hansteen

16th Apr 2010 08:24

The emergence of Apple's iPad device bodes well for chip maker ARM Holdings, according to Goldman Sachs, which has raised its target price on the company to 250p from 230p.'Our latest analysis of potential unit penetration of the Apple iPad as a disruptive new entrant into the converged device industry has led us to increase our royalty forecasts for ARM,' the broker said.It says that availability of iPad applications may stoke demand for ARM technologies.The broker has a 'neutral' view on ARM. A better performance by Toyota in the US in March suggests that the accident prone Japanese car manufacturer's reputation in other regions may be on the mend, which should be good news for car dealer Inchcape. "While Inchcape is not exposed to the US market, this was where the product recall stemmed from and likely to have the largest impact for the value of the Toyota brand. We have also not seen anything significant movement in residual values in Toyota to suggest any brand damage here either. Elsewhere in Europe and the rest of the world, Toyota appears to be doing a very good job in at least maintaining market share," Panmure Gordon suggests.The broker is bumping up its Inchcape target price from 34p to 42p, despite its suspicion that "trading in Singapore remains tough". On the plus side, "the declines seen in Russia are below previous expectations, with strong momentum appearing to continue apace in Hong Kong and Australia," the broker notes."We note major US motor retailers such as AutoNation and Penske have raised guidance recently, which could be a sign that the global automotive market is picking up," the broker speculates. The broker's 'buy' recommendation is maintained.KBC Peel Hunt has given a warm welcome to Hansteen's purchase of a number of assets from a distressed seller, moving its recommendation on the property investment group back to 'buy' from 'hold'.The deal represents Hansteen's first major UK acquisition and comes exactly a month after a German purchase that was similar in nature. "Both this portfolio and HBI Germany were effectively starved of capital and management in their former ownerships," KBC Peel Hunt notes, adding that the UK purchase is "classic Hansteen value territory".The company's shares have fallen back since the German acquisition was announced, which has also prompted KBC's renewed enthusiasm for the stock. "The discount on our forward NAV [net asset values] estimates for this year and next of 10% and 16% respectively exclude any benefit from management acumen," KBC Peel Hunt says."After allowing for empty rates on the portfolio, there is still a 0.7p enhancement on the earnings [[er share] in a full year (i.e. for 2011) our estimate rises from 5.1p to 5.8p, and thus an earnings yield of 7.3%," the broker concludes.