Thursday tips round-up: Logica, CSC, Rightmove

6th May 2010 06:06

Put Logica among the likely losers from a hung Parliament. The Government is by far the biggest customer of the IT services provider in its home market, accounting for 62 per cent of last year's UK sales. The company works on big-ticket technology projects for the Crown Prosecution Service, the Police National Database, the Department for Constitutional Affairs and the Ministry of Defence, among others.The comfort is that none of these contracts are due for renewal this year or next and that severe pressure on government finances ? in short, the imperative to deliver public services for less ? means that the long-term pace of state sector outsourcing should only increase, whatever the stripe of the next administration. But in the short term, a hung Parliament is likely to prove unhelpful, if only in slowing the speed at which the big decisions on government departments are taken. At 134¼p ? up 18 per cent since January ? or 11 times current-year earnings, and providing a 2.6 per cent yield, hold on, says the Times.When traders get to their desks on Monday, Liberty's place on the FTSE 100 will have been taken by its nationwide shopping centre business, Capital Shopping Centres, or CSC, while its London property unit will be run by a different company, Capital and Counties (C&C), which will struggle to make the FTSE 250. For those who have the stock, there is no reason to sell because it should provide solid enough returns for the moment. Hold, according to the Independent.Rightmove's dominance cannot last for ever, not least because companies in its position find it all too easy to get complacent. And the shares are up by more than 40 per cent so far this year, trading on a toppish 18.6 times Canaccord's full-year forecasts. At that level they are fully valued, so avoid for now, says the Independent.Lancashire's business model ensures that, where it suffers a loss, it should also benefit from the increase in premium rates that follows. Pricing for rigs in the US Gulf is already up 60 per cent month-on-month, helping to offset the overall fall in premiums that the company expects in 2010. With a worldwide staff of only 100 in three offices, Lancashire has lower costs than rivals and should be able to take underwriting decisions more quickly. The potential for big hurricane losses in 2010 is an inevitable concern, but at 454p, or a 7 per cent discount to net tangible assets, the shares look cheap against the premium that historically they have enjoyed. Tuck away, says the Times.Spirent Communications makes testing equipment used by manufacturers to make sure their new products from smartphones to Wi-Fi routers and networks are ready for the market. A multiple of 18.5 times forecast 2010 earnings is not overly expensive for a recovery play that is shaking off some legacy businesses and momentum is moving in Spirent's direction, so buy, says the Independent.The cyclical nature of the hotel industry is demonstrated in the first-quarter numbers from Millennium & Copthorne Hotels. After a torrid couple of years when business travel hit the buffers, the company is starting to emerge from the recessionary black hole, with revenue per available room (revpar) ? the key industry metric ? rising by 3.2 per cent, driven by Singapore and New York. The shares have more than doubled over the past 12 months in anticipation of the recovery, but, at 470p, may mark time for now. Pass, says the Times.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.