Thursday tips round-up: Sage, BG, Thomas Cook

2nd Dec 2010 06:32

There are definite signs that the market may be running out of patience with Sage Group. The company, one of our most established software groups, has paid a dividend since its 1989 stock market float. But the emphasis in recent years has been on acquisitions to add to a pedestrian rate of growth, and there is no sign yet of these coming through. The problem is that there are no signs of any obvious transformational deal that can justify the rating Sage enjoys in the market, about 14 times' this year's earnings, says the Times.BG Group is still on a roll. Not content with its unprecedented string of exploration successes in Brazil's promising Santos Basin, the company yesterday announced a gas discovery at its Chewa-1 exploration well in Tanzania. There are more to come. Keep buying, says the Independent.The auditors have taken the view that the ash cloud this spring, and one or two other slings and arrows, are taken as one-offs, not too relevant to what happened to the travel company Thomas Cook. These one-offs came in at £195 million for the year to the end of September. The trouble is that losing a number of holidays to an unexpected ash cloud is just one of the risks of running a travel business. The shares, even on 7 times earnings without one-offs, take a lot on trust, says the Times.But the Independent believes that shares in Thomas Cook, which have taken a battering this year, now look cheap on an earnings multiple of 7.2 for next year. Buy, the paper says.One person rubbing his hands together in this cold weather, and not just to keep them warm, is Philip Fellowes-Prynne, chief executive of May Gurney. This outsourcer has the job of gritting the roads and then subsequently repairing the damage caused by the frost. The shares are on just short of ten times this year's earnings. Attractive given the strength of the forward order book and potential for further contract wins, the Times says. RPC Group makes rigid plastic packaging - including the bottles used for Heinz ketchup. The shares have been weak of late, as the price of the polymer raw materials RPC uses hit new highs - but investor need not have fretted. The interim results released yesterday were very good, with revenues rising 9% to £381.9m and pre-tax profits up 52pc to £18m. The shares remain a buy, according to the Telegraph's Questor.Gold miners - including Cluff - have had an excellent year as the metal's price has soared to new highs - but for most of the shares to be re-rated further, companies need to post success in their exploration programmes and bring them closer to production. The company, which is run by industry veteran Algy Cluff, said yesterday its drilling had found new areas of gold mineralisation at its 78%-owned Kalsaka mine in Burkina Faso. The Telegraph's Questor says buy.The financial services group Brewin Dolphin trades on pretty thin multiples. Arden Partners puts the shares on less than 10 times forward earnings for next year, which is hardly demanding, especially in light of a forecast yield of more than 5%. Buy, 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.