Thursday tips round-up: Petrofac, Antofagasta, Electrocomponents

8th Apr 2010 06:44

EnQuest is the combination of Petrofac's UK North Sea fields with those of Swiss group Lundin Petroleum. It contains assets such as a 27.7% stake in West Don field in the West of Shetland and other blocks in the vicinity.Over the weekend, shareholders should have received one share in EnQuest for each Petrofac share they own. It is expected that EnQuest will act as a consolidator in the North Sea. It will have no debt and cash flow from the start, so it in a pretty good position. Petrofac shares are trading on a December 2010 earnings multiple of 15.6 times, falling to 14.9 in 2011. The stance on Petrofac shares remains buy and investors should hold on to their EnQuest holding for now, the Telegraph suggests.Copper prices crossed the $8,000 a tonne level yesterday - the highest level the price had been since the collapse of Lehman Brothers in 2008. Antofagasta is a pure copper company. The shares trade on a December 2010 earning multiple of 15.6, falling to 14 next year. Wait to buy the shares until some profit taking is seen suggests the Telegraph.Distributors of electronic components are among the stock market's clearest bellwethers. Their shares are usually the first to feel the fallout from economic downturn, but also the first to sense recovery. Electrocomponents, at 233p, up 6p, is valued at 18 times current-year earnings. The sector is broad enough for both it and its rivals to grow and the 4.7% dividend yield is attractive. Even so, look to buy lower down says the Times.The Independent adds that it would be improper not to point out the risks, which with Electrocomponents are linked to a worsening economy, a fate most sensible economists tend to think is now unlikely, and a problem for all businesses. Buy.The Chilean earthquake should not prevent underwriter Beazley from hitting its forecasts. Premium rates are still high enough for the company to make a profit from its underwriting, even if returns from investing remain low. Hold says the Independent.Chloride's advantage is that, unlike most of its peers, it has contracted out manufacturing to the Far East and does not have to bear the costs of under-utilised factories when sales start to slow. A bid from American rivals such as Emerson Electric or Eaton continues to be a possibility, especially if sterling remains weak. That explains why the shares, at 220½p, trade at 20 times current-year earnings, a premium to their peers. However, Chloride should be able to retain its own momentum. Having proved its resilience through the downturn, with orders starting to improve and net debt still negligible, Hold on says the Times.At 80½p, or ten times historic earnings per share, shares in programme maker Shed Media are inexpensive but remain a binary bet on the outcome of MBO talks. Hold if you own them; pass if you don't says the Times.Shed remains locked in buyout talks with private equity investors. If an offer comes through, backers should see gains, but if the suitors back off, investors may have to endure some losses in the short term. Hold says the Independent.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.