Sunday tips round-up: Balfour Beatty, Autonomy, Carillion

17th Jan 2010 11:25

Balfour Beatty shares have underperformed since their recommendation, as the market fretted about what effect future cuts in UK public expenditure would have on its business.The shares were first tipped by the Telegraph on January 25 last year and Questor recommended taking up your rights to fund the acquisition on September 20 at a 48pc discount. This gave a theoretical ex-right price of 299.175p for the original tip. The shares are now 7pc below this level, but remain a buy.Autonomy proves that when brain power meets commercial nous, the combination is electric, writes the Daily Mail. On January 12, founder Mike Lynch said turnover for 2009 should be $740 million (£455 million), an increase of 47 per cent on 2008 (the company reports in dollars in line with most international technology businesses). Pre-tax profits are expected to rise by an even more impressive 59 per cent to $330 million. Investors might wish to book some profits by selling a third of their shares, but keep the rest as this company should continue to thrive.The market does not appear to understand what Carillion is - that's why its shares are underrated. Carillion is considered a construction firm with some ancillary support services business around the edge. This is not true. Around 50pc of earnings are now generated by support services - and the market rates these businesses higher.The business is debt-free and earnings are expected to grow in the double digits - yet the shares are trading on a derisory rating. The December 2010 earnings multiple is just 8.2 times, and the shares are yielding a solid 4.5pc. Buy, says the Telegraph.Melrose shares are trading at 321p, yet many brokers are impressed by this company and believe the shares should be 400p or more. Buy, says the Daily Mail.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.