Friday tips round-up: DS Smith, Xstrata, HMV...

10th Dec 2010 06:44

As a low-growth, low-margin stock, packaging group DS Smith had previously been bought for its high yield; after their sharp rise since halfway through last year, the shares now return a little more than 2%. They are on about 13 times this year's earnings, a premium rating for the stock, but sustainable if its targets are met. Hold says the Times.Xstrata has a strong exposure to coal and copper - two commodities that are likely to have bullish price action over the next year. In its 2009 results, coal made up 41% of the group's operating profit, with copper making up 40%. Xstrata has also recently moved into iron ore - another area where prices have been rising rapidly. The shares are trading on a December 2010 earnings multiple of 12.5 times, falling to 9.4 next year. This is a slight premium to peers, but reflects the ambitious growth plans, buy says the Telegraph.The latest update from outsourcing and construction group Carillion was upbeat. The company is confident of meeting full-year targets. The shares trade on a December 2010 earnings multiple of 9.3 times, falling to 9 next year. They are supported by a worthwhile yield of 4.2%, buy says the Telegraph.CD and games retailer HMV shares now sell on about 3.6 times this year's earnings. If you genuinely believe that in three years' time the average consumer is going to wake up and think, must buy an iPad today, I'll go to HMV, then they are a buy, but the Times doesn't.Four years ago Premier Farnell pledged to move further into higher-margin engineering products, and this sector saw 41 per cent growth in the quarter, against a more pedestrian 25% rise from the more standardised marketing and distribution division. The shares, even after yesterday's fall, sell on 15 times earnings. This may suggest no immediate upside, but they remain a long-term hold says the Times.Fundamentally, Premier Farnell is a well-run, quality operation. but now is a good time to take profits adds the Independent. Go back into the stock if it shows signs of protracted weakness and the valuation becomes less stretched as a result.Construction equipment hirer Ashtead looks set to benfit further from the much-improved trends in its main market and elsewhere. Factoring in the potential revisions to consensus, the stock trades on multiples of around 5.3 times enterprise value to earnings before interest, tax, depreciation and amortisation, putting it behind rivals such as United Rentals. Buy says the Independent.Hot on the heels of the oil-and-gas group's discovery at Angklung in Indonesia, Salamander not only produced attractive estimates for Angklung yesterday, but also offered some tasty expectations for two nearby prospects. Angklung is thought to contain mean gas resources of a respectable 290 billion cubic feet (bcf). The Kecapi and Bedug prospects are estimated at 209bcf and 344bcf respectively, and their chances of success at 54% and 61%. Buy says the Independent.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.