Thursday tips round-up: United Utilities, Petra Diamonds

2nd Feb 2012 06:54

The Tempus column in the Times has its mind on United Utilities, the north England-focused water company. This is a highly regulated stock which is all about yield. The current promise is for yield to grow each year at inflation plus 2%. In 2012 the full year yield is going to come in at 5.3% although this is likely to fall with inflation. However, Tempus doesn't think United, or the other water companies, are going to be forced to stump up for the huge amounts needed to replace the UK's ageing water infrastructure. That being the case, the stock is a hold.Tempus also remains skeptical over Home Retail, the owners of Argos, and thinks it's best to avoid the brokerage and fund management firm, Brewin Dolphin, on weakness in the sector.Meanwhile in the Telegraph, Questor's eyes are lighting up at weakness in the diamond sector. The column has been banging on for a while about Petra Diamonds which released strong production numbers yesterday.Stocks in diamond companies have tumbled as the price of precious stones has fallen recently but analysts believe demand will pick up as the global recovery gets going. Trading at just 7.2 times forward earnings, Questor says Petra is a 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.