Thursday tips round-up: Millennium & Copthorne, Morgan Crucible, Game Group

17th Feb 2011 06:35

Richard Hartman, chief executive of Millennium & Copthorne, said last May that he wanted to retire by the end of the year, but he was still there yesterday fielding questions on the hotel group's 2010 results. M&C is unusual in the sector because it owns most of its assets. The big five managed chains typically will seek as many footprints in as many cities as possible. Hartman says that this model is not always understood by prospective candidates for his job, who may be more happy with the managed hotel model. M&C shares nudged ahead 3p to 583¾p yesterday, putting them on about 16 times' this year's earnings. The model is robust enough, but at this level there looks to be no reason to chase the shares for now, says the Times.Morgan Crucible, once a dull but worthy engineer, has set itself some exciting targets as it moves into higher-value products and away from more cyclical markets. This year the company was reorganised into two divisions, engineered materials and ceramics. Morgan pledged yesterday that by the year 2013 it would double underlying pre-tax profit, which grew by 59% in 2010 to £75.7m as the group emerged from the downturn. Worth locking away if those targets can be met, says the Times. The Independent says the shares have woken up to the Morgan Crucible story. The valuation, at 12.73 times next year's earnings, is not aggressive (the forecast yield is moderate at just under 3%). By all means take profits, but we'd back the company to meet its targets. Hold, says the Independent.Game Group, the computer game retailer, touted its growth potential at a strategy day for analysts yesterday. Despite Game's tempting dividend yield (8.3 per cent for 2011) and a modest forward earnings multiple of 9.26, we don't see much upside for Game's shares. We fear Game is not truly facing up to how many of its 1,300-plus stores it will have to shed to remain competitive. Sell, says the Independent.The property group Helical Bar's shares have weakened (though it raised around £29m through a placing in December) and the economic picture remains cloudy (though parts of the property market are showing signs of life). The Independent thinks the stock, which trades a small premium to current net asset values against a discount for peers, may continue to struggle to find direction as the market looks for firmer signs of recovery in the broader sector. Hold, the paper says.Gold miner African Barrick Gold shares are now back below the float price in March last year. Much of the second half of last year was spent wrestling with geological and other problems at its Buzwagi mine and, while these are pretty well resolved, the market remains cautious. The shares are on about 1.2 times' net present value of reserves, which seems low for the sector, but, until further progress can be demonstrated, any upside looks limited, according to the Times.Engineering firm Ricardo serves a wide customer base through a range of industrial sectors, government agencies and national and international regulatory authorities. Ricardo was hard hit by the downturn in the US car industry, but conditions have improved markedly over the past nine months. One of the encouraging aspects of recent industrial data was an impressive recovery in the manufacturing industry, a trend on which Ricardo should capitalise; meanwhile, the shares offer a useful yield of nearly 4 per cent. The rating has recovered ground since the depths of 2008 but still looks good value. Buy, says the Scotsman.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.