Thursday tips round-up: BG, Inchcape, Halfords

30th Jul 2009 06:04

Recent fluctuations in BG's share price, from 1162p in early June to 979.5p earlier this month (it has recovered since) suggest it is time to buy. The rating, at 14.3 times next year's earnings, is not overly demanding, although this stock, with its 1.3 per cent yield, is not for income seekers. Gordon Grey, at Collins Stewart, said: "We would view any weakness as a buying opportunity as the long-term growth outlook seems very much intact." The Independent agrees. Buy.Yesterday's first-half results from Inchcape provided a useful reminder of how plummeting new vehicle sales are not only a British or American phenomenon. Inchcape was careful not to call the turn. It does not expect a sales recovery until "well into" 2010. Even so, it is taking market share and stimulus measures, such as scrappage schemes and tax incentives, should start to feed through. At 26½p, the shares, which come without a dividend, have quadrupled from their rights price to trade at 17 times 2010 earnings. That is high enough for now, says the Times.Halfords has again signalled that sales of satellite navigation systems, which veered off course at the end of last year, are still falling, albeit in line with expectations. The group's forward price-earnings ratio is a modest 10.4 for 2010 and the forecast yield is 4.9 per cent. Despite a sharp jump since the depths of the autumn, Halfords' shares have a clear(ish) road ahead. Buy, says the Independent.Of the three mid-cap engineering companies to file first-half results yesterday, Morgan Crucible was the only one not to have issued a profit warning this year. Not that it has stopped shares in the maker of carbon and ceramic components from underperforming the FTSE all-share index by 28 per cent over the past 12 months. There is no sign of wider recovery. But at 119p, or eight times 2010 earnings, and yielding 5.9 per cent, the shares should be over the worst. Buy, according to the Times.Rathbone continues to increase funds under management at much the same rate as before the credit crunch ? it pulled in £275 million of net new money over the past six months, implying underlying growth of nearly 6 per cent. Its possession of a banking licence, a rarity for its sector, appears to have served it well in attracting disaffected clients of larger lenders that have sought state guarantees. At 741p, or 14 times 2010 earnings, the shares are not cheap. However, a 5.7 per cent yield gives incentive to hold, says the Times.The Independent adds that the yield, at 5.4 per cent, is okay but only just covered by earnings. A market recovery would benefit Rathbones hugely, of course, and there are signs of that happening. But there are others that would arguably benefit just as much while offering rather more attractive growth opportunities. Sell.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.