Wednesday tips round-up: British Land, Premier Foods, Micro Focus...

16th Feb 2011 06:38

More good news from British Land, with third-quarter results that had analysts gushing. The property company showed underlying portfolio growth of 2.3% (to £9.3bn) in the third quarter, comfortably ahead of the 1.2% and the 1.4% in the first and second quarters respectively. The shares are trading at a slight premium to NAV forecasts and at around par to yesterday's reported figure. As such it is not cheap compared to peers. Hold, not least for the yield (well covered by earnings), which sits at 4.8%, says the Independent.Premier Foods without its debt burden is now in far better shape to reinvest in its brands in the hugely lucrative UK grocery sector. Moreover, its shares only trade on a modest forward earnings ratio of 5.6. That said, with consumers tightening their belts and its Brookes Avana problems not yet resolved, we advise that potential investors hold fire until there is further evidence of the group turning the corner. Hold says the Independent.Micro Focus plunged last night after revealing that it had lost some large US deals in its third quarter. The IT firm also warned that it was unlikely to able to recover the shortfall in revenues in the final three months of its financial year. The stock now trades on around 8 times forecast earnings, leaving it at a 55% or so discount to the wider sector. That, coupled with the promise of the restructuring, makes this a buy, albeit a risky one, says the Independent.The Telegraph has slapped sell ratings on three of its former favourites - Northern Foods, Ashtead and distributor Diploma. All have risen substantially and it is time to take profits the paper says. Rentokil's adjusted profits before tax for 2010 should come in at £193m to £194m, up from £166.5m in 2009, and some optimists in the City are shooting for as much as £234m in 2011. For now, they trade on about 12 times' last year's earnings. Expect further upward movement in due course ? and at least the worst of the shocks are over, the Times says.Spirent makes hardware that allows IT companies to test future products more quickly and efficiently, meaning that in hugely competitive fields such as GPS equipment and smartphones they can get these to market more quickly. It is paying $15m for The Fanfare Group, which produces software that allows producers to link its own hardware with that of rivals. Operating profits before one-offs for last year should be up by about 23%to $125m (£77.5m), according to the house broker, putting the shares on about 20 times' earnings. A strong long-term hold says the Times.Water utility Pennon is promising the highest rate of dividend rise in the sector, up 9.1% over a year if RPI stays where it is. The shares yield 4.1%, a decent enough return even without the prospects for waste energy arm Viridor, the Times says.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.