Tuesday tips round-up; Wolseley, BHP Billiton, Centamin

12th Jan 2010 06:36

Ireland was not the biggest bet in Wolseley's decade-long multibillion-pound global acquisition spree, but the building-material distributor's exit from the country provides one of the starkest examples of how its ambitions have changed.Only five years ago, Wolseley paid €183m alone for Brooks, one of the four businesses through which it traded in Ireland. At the weekend, it sold the lot to a private equity group for less than €27m. Wolseley's shares are commonly traded as a play on a recovery in American construction; nearly half of its sales are drawn from North America, with its biggest exposure being to industrial and commercial markets. At £14.26, up 15% this year alone ? to 16 times next year's earnings ? the shares have run far enough for now. Pass says the Times.The recession has hit Wolseley hard, forcing a reorganisation of its shares and a whopping £1bn rights issue, last March, to take on its eye-watering £2.5bn debts. The newly weighted shares have traded within a fairly flat range since, with an estimated valuation to Ebitda ratio of 15.5 times based on calendar 2010 broker forecasts. But the Irish sales could be just the beginning of a major restructuring, hold says the Independent.Investors in stockbroker Collins Stewart have endured a rough ride of late on worries about its US side. But Collins trades on an undemanding multiple of 12.8 times borkers' forecast earnings for 2010, which suggests that concerns about the US business or otherwise have been overdone. Buy says the Independent.Solar cell group PV Crystalox's immediate appeal is that, fuelled by government initiatives to meet long-term renewable energy targets, solar installations in Europe are forecast to rise strongly in 2010: to 10.8 GW from 6.8 GW in 2009 on usually reliable industry estimates. The concern is whether solar prices will get any worse. However, PV Crystalox remained profitable even at last year's depressed prices. On about nine times 2010 earnings, buy says the Times.BHP Billiton, the largest mining company in the world, has an exposure to a wide range of commodities. It is essentially a one-stop commodity shop that has exposure to a wide range of metals and minerals - and oil. BHP shares are now trading on a June 2010 earnings multiple of 18.6 times, but this falls to 13.6 in 2011. Buy says the Telegraph.Yesterday's disclosure that Centamin's sole project ? Sukari, in Egypt's Eastern Desert ? has exported its first gold went some way towards justifying its soaring share price, albeit the scheme is six months behind schedule and one fifth over budget. The expected promotion to the FTSE 250 in March should underpin the shares, as should the update on its proven and probable reserves that is scheduled for the end of this month. At 137¼p, hold on says the Times.At the end of the last quarter, the company had $59m (£36.5m) in cash, which is more than it needs to finish its current underground development plans. Gold production remains unhedged, so the group will be exposed to any movements in the gold price. Centamin remains a buy says the Telegraph.Jacques Vert, the Aim-listed 25-store womenswear chain and concession business, added to the festive retail feelgood factor yesterday with a 2.1% rise in sales for the 10 weeks since its half year, plus doubled pre-tax profits to £2.9m for the 26 weeks to 24 October. Given its improved performance, Jacques Vert represents a bargain, despite liquidity issues and management's caution about the second half. 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.