Wednesday tips round-up: HSBC, Taylor Wimpey, Mouchel...

4th Aug 2010 06:42

HSBC is present in 87 countries around the world but is, sensibly, focusing its firepower on Asia because it believes the Chinese economy will outstrip the US by 2020.The market is expecting substantial increases in the dividend payment over the next few years with the prospective yield for the shares rising from 3.5% this year to 4.2% in 2011 and then to 4.6% in 2012. The shares are trading on a December 2010 multiple of 14.5, falling to 10.8 next year. The shares remain a buy says the Telegraph.Taylor Wimpey provided a much-needed ray of hope for investors in the house-building sector yesterday with a well-received set of results as the company returned to profit (£19.6m at the pre-tax level). The current level of around 30p, that leaves the stock at a significant discount to brokers' 58.7p estimate of the current Net Asset Value per share. Debt levels remain a worry as does the fact that the hoped-for sale of the company's North American assets has yet to materialise. Hold says the Independent.Taylor Wimpey is a completely different prospect to a year ago. It trades at 21 times forecast earnings for 2011, a fairly full valuation, but is more geared than its rivals to a recovery, which makes it a decent bet. Buy on weakness says the Times.Mouchel has had a year to forget. The outsourcing company fought a rearguard action against a hostile takeover by VT Group and now faces the prospect of hefty cuts to its lifeblood ? public sector projects. There is no doubt that at a mere 5½ times next year's forecasts, Mouchel is cheap. Yet there appear to be few catalysts for a re-rating of the stock in the short term and plenty of potential for further jitters. Sell says the Times.Miner Fresnillo's cracking numbers led to only a slight uplift in the share price, suggesting that the market has already sussed out the right level for the stock. And despite net cash of $390m (£245m), the interim dividend of 9.2c is disappointing. Fresnillo is one of those oft-mentioned takeover targets, which may also be responsible for at least some of the momentum behind the shares. Without that bait, the stock may languish a little. Hold says the Independent.Valve maker Rotork's stock has gained more than 27% this year alone. It stands on a full-year multiple of 20 times forecast earnings, it is time to cash in, take profits and look for better opportunities elsewhere. Sell says the Independent.TalkTalk added 61,000 new users in the first quarter, stripping out former AOL and Tiscali customers that left, but this pales in comparison to the growth of BT and BSkyB in the same period. Adding mobile to its stable of products could help to shore up its customer base against low-cost providers such as Tesco and O2. The business continues to offer double-digit growth and could yet be attractive to private equity bidders or a trade buyer such as Vodafone. Buy says the Times.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.