Wednesday tips round-up: Construction, ITE, IG Group ...

30th Nov 2011 07:34

Much has changed since the Independent's Investment Column looked at spread betting firm IG Group. For one thing, the economic outlook has turned darker, making IG's chunky prospective dividend yield of 5% (and higher on some estimates) look that much more attractive, the Indy reckons. The income, and the quality of the UK business, suddenly appears more valuable in light of the weaker trends in the global economy. Rising revenues in uncertain times, a quality franchise and a healthy dividend yield at a time when earnings across all manner of sectors are in question - make IG look like a good bet. At around 12 times forward earnings for next year, falling to under 11 times for the year after, IG is not expensive either. Take a punt on the shares, says the Indy.Martin Waller, writing in the Tempus column in The Times, reckons Electra Private Equity is worth holding on to. Private equity deals remain hard to come by, but Electra's model is a flexible one and it has the option of investing in a wide range of different assets, Waller notes. The shares remain a strong long-term hold, even if it seems a bit soon to talk about a recovery in the Mergers & Acquisitions market.Spending on infrastructure is very much back on the agenda in the troubled West, as governments seek to boost employment. while plans in emerging countries with budget surpluses, such as Qatar, to invest in municipal assets means there are significant opportunities for construction firms, writes Questor in the Daily Telegraph. The whole sector de-rated over the summer and now it offers good growth and yields. Questor's preferred plays are Carillion and AMEC, but it also likes Balfour Beatty, which yesterday announced a contract win in Qatar which underlined why it bought US group Parsons Brinckerhoff in 2009. Yielding 5.5%, the shares are a buy, says Questor.Casting his eye over other UK operators, Questor's Garry White also gives the thumbs-up to Kier Group (yielding 4.6%), Morgan Sindall (yielding 7.7% and on an earnings multiple of 7.2), and WS Atkins (yielding 4.9%). Russell Taylor, the chief executive of exhibitions organiser ITE, is keen on taking the company concept to virgin territories, such as Indonesia and Malaysia, but the core of the business is in Russia, and the revival of the Russian economy on the back of higher oil and gas prices over the past couple of years is reflected in full-year figures to the end of September, notes Tempus in The Times. While ITE's construction show in Moscow saw a 24 per cent rise in space taken and revenues, this is still not back to the levels of 2008, so there is more growth to come. The shares have come back by about a quarter since the summer and now sell on 12 times earnings, making the shares reasonable long-term value in Tempus's book.The Independent's Investment Column casts its eyes over independent gold miner, Cluff Gold, and likes what it sees. Although gold is down from its September peak it is still just over a quarter higher than it was a year ago and, with havens likely to be in increasing demand in the coming months, is tipped to rise further during that period. This, combined with Cluff's strong cash balance - of $25.6m on September 30 - makes the group a solid proposition, the column argues. --jhPlease 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.