Thursday tips round-up: LSE, Speedy Hire, Barratt

17th Nov 2011 06:48

The Telegraph's Questor column sizes up the house builder Barratt Developments which announced a 25.9% rise in new reservations in an update yesterday. The key metric though was that its average selling price has risen to £207,000, up 7%. This is a result, says Questor, of the firm building bigger homes for people who already have one foot on the property ladder, as banks continue to be wary of first time buyers.By building more expensive properties in the South East Barratt is making decent profits. It is also doing so from a lot of land bought during the 2008 slump, which yields very high margins. This high margin land means that by 2013 Barratt is expected to be trading at a price to earnings multiple of 8.7 times. For that reason, Questors says Barratt is a buy. Some people ask who is making money out of the current financial crisis? Well one company that seems to be doing so is the London Stock Exchange. The Times's Tempus column looks at this iconic brand in the wake of it announcing some impressive numbers yesterday. Total revenues were up 20% at £386.5 m yielding adjusted operating profits of £214.3m, up 38 per cent. What's not to like?Tempus points out, however, that a significant chunk of this money (£54.3m) is being generated by LSE's Italian operations. The financial turbulence that has hit Italy means its clearing house CC&G benefits from the higher interest rates available on Italian debt, in addition to the massive volume of transactions that are generated by the panic currently rattling investors in Italy.The question is, for how much longer is this sustainable? Goldman Sachs has issued a note saying "not very", Tempus agrees and says investors should steer clear of LSE.The Independent takes a look at Speedy Hire, the tool hiring firm which yesterday announced decent profits for its first half of the year and confirmed it would meet expectations for the full year.Yet the firm's share price has dropped 23% in 2011, 95% since September 2008. The market seems to believe that as economic storm clouds darken, people won't need the equipment that Speedy Hire has to offer, but, citing some statistics from Peel Hunt showing a discount-to-net-assets of 60%, the Indy thinks Speedy Hire is undervalued and is a decent buy.bsPlease 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.