Thursday tips round-up: BATs, Morgan Crucible, Aviva...

28th Jul 2011 06:46

British American Tobacco has tended to forge ahead of its smaller quoted rival Imperial Group, and this week's results have proved no exception. Imps, mired in a price war in Spain, reported a 3 per cent decline in cigarette sales in its nine-month trading update. BAT came in with a 1 per cent decline in the first half of this year, against a market that fell by 2 per cent. BAT is well on the way to meet its 35 per cent operating margin target for 2012, probably this year. Adjusted first-half profits of £2,760 million were up 12 per cent on last year. The shares sell on about 15 times' earnings, at the top of their range. That dividend yield is always going to provide a degree of support, but it is difficult to see much upside for the price at this level and, looking at that share price graph, those in for a while might consider taking some profits, suggests the Times.The last time we looked at Morgan Crucible, we decided to hold, reasoning that while the company boasted strong prospects, the shares, though not forbiddingly pricey, had already woken up to the growth story. Since then, the industrial materials group, which serves a variety of markets, including energy, has continued to show strength. Yesterday's half-yearly results, for example, showed an 11.8 per cent rise in revenues against the same period last year. In constant currency terms, the hike was 14 per cent. So, is it time to buy again? In a word, yes. Besides the strong performance, and despite share price gains in recent months, the valuation has come down. Buy, recommends the Independent.AVIVA is the world's sixth-largest insurer and the biggest in the UK. A short year ago, Aviva initiated a thorough overhaul of its operations - the benefits of which are now beginning to appear. A number of non-core operations have been sold, including the RAC for £1 billion to the Carlyle Group, and the 15.1 per cent stake in a Dutch insurer, which raised a little under £400 million. Aviva is due to report its interim results on 4 August and these are expected to be reassuring because there had been concerns over its exposure to the European sovereign debt market. Buy, says the Scotsman.Shares in Brewin Dolphin took a dive yesterday after the financial services firm released its third-quarter update. The numbers did not make for fantastic reading. Most notably, its investment management revenue of £64m was a sizeable 11 per cent behind forecasts, while funds under management missed hopes by 3 per cent. Investors should also note that although Brewin's share price has been under pressure since March, City scribblers have been positive towards the group. The reason is that back in May, the company announced plans to tackle the thorny issue of why its operating margin was significantly lower than those of rivals such as Rathbones.The major review that was launched at the time is expected to take up to three years, although the company did say it hoped to see some positive changes in the near future. Nonetheless, it remains a long-term issue and, if you're prepared to wait, it could provide some significant upside as the company makes improvements, according to the Independent, which gives Brewin a buy.BCPlease 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.