Wednesday tips round-up: BG, Carpetright, Reed Elsevier

1st Jul 2009 06:45

BG is regarded as a perennial bid target, but it is the growth prospects of the group in Australian LNG, its assets in offshore Brazil and now US shale gas that are the real reasons to own the shares. The shares are trading on a December 2009 earnings multiple of 14.3 times, falling to 12.6 in 2010. The dividend yield is just 1.1% so this is not a play for income-seekers. Buy says the Telegraph.No doubt Carpetright is the most impressive business in its sector, but do you really want to invest in a group that yesterday put out frankly woeful numbers and that concedes it will be at least another 12 months before anything gets better? Hold on, however, on the expectation that Carpetright will pick up significant slices of market share in the coming months. Cautious hold says the Independent.Mortgage approvals, the best forward indicator of Carpetright's fortunes, are rising, suggesting that like-for-like sales gains should lie ahead. But at 561p, or 22 times earnings, recovery is already priced in. Pass says the Times.Any growth this year at Reed Elsevier will be decidedly single digit even before currencies move the numbers around ? and that is not simply because advertising is tumbling at its specialist magazines. At ten times forward earnings, Reed does not yet look particularly cheap. Hold until detail of its restructuring plans emerge says the Times.Hill & Smith shares are a play on extending the life of ageing transport infrastructure and, as such, will benefit from the steady release of funds earmarked for stimulus ? and not only in the UK (half of profits now come from overseas). At 231¼p, up 11¾p, or six times earnings, and yielding 4.8%, buy on weakness says the Times.Laird, the group that makes components that reduce interference between electronic devices, issued a trading statement yesterday which sent the stock down 14.8%. With little guidance on when things might improve, reasons to buy the stock are hard to find, especially having seen it get more expensive in the last three months. Sell says the Independent.Atlantic Coal, the group that mines in Pennsylvania. Losses were up, saw production and revenues down last year while demand from its major client, the steel industry, also dropped off. Atlantic says it is actually performing well given that the mine went off-line for periods of the last 12 months, a problem it says is now behind the company. Atlantic Coal is worth a punt. Buy says the Independent.Yesterday's trading update confirmed that, for the year ending May 31, coal miner Hargreaves numbers were in line with expectations. The company is expected to grow profits by 20% in 2010, so its rating looks very low. The shares are trading on a lowly May 2009 multiple of 6.6 times, falling to 5.9 times in 2010. Coal will be an integral part of our energy future, with the Government's support of "clean coal" underpinning the industry. The shares are a buy says the Telegraph. 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.