Wednesday tips round-up: Ladbrokes, RWS, Croda...

12th Oct 2011 07:02

When it comes to mergers and acquisitions Ladbrokes is starting to look a bit like the Grand Old Duke of York; the bookmaker marches its way to the top of the hill then marches back down again, according to the Investment Column in the Independent. First it was 888 Holdings and more recently Sportingbet. Now management has a job on its hands; shares have not exactly been singing and investors must be convinced that the company has a solid strategy in place, particularly given the relative health of its chief rival, William Hill. That said, the forthcoming third-quarter results should look reasonably good, with fixed-odds betting terminals still filling the coffers (notwithstanding increases in VAT and duty) and sporting results looking favourable. In February we said hold at 139.5p. Take the price fall as a buying opportunity, recommends the paper.The main drivers for the RWS business are macro-economic trends, and the level of innovations coming through that clients such as Porsche and Huawei, the Chinese telecoms group, want to protect, says the Tempus column in the Times. Now the company is moving further along the production chain by buying the New York-based inovia, which provides the logistics to allow corporates to take a patent granted in one territory and register it in other countries by putting them in touch with patent lawyers. The deal is cautiously structured, with $5.8 million (£3.7 million) up front for a third and a maximum of $25.4 million for the rest heavily tied to future revenues and earnings. The deal makes sense and, those analysts say, could increase pre-tax profits by 15 per cent once it is bedded in. The shares are on about 16 times this year's earnings. A positive trading statement today could spark some interest, but that rating looks about right for now, the paper says.Croda supplies chemicals used in the agriculture and consumer care materials, notes the Scotsman. Its products are used in high-value face creams and in some high-growth healthcare markets, allowing it to share in the growth its cosmetics customers, like Estee Lauder, are seeing in China. As a group, Croda comprises many units focusing on specialty niches, rather than being a bulk or integrated chemicals business. Indeed, its management argues it should not be viewed as a single £1 billion-turnover business but instead as a group of hundreds of small entrepreneurial enterprises. Croda has proved adept at strengthening relationships with customers, focusing on product development rather than just price. Croda reported a 30 per cent rise in profits and is increasing prices to pass on higher costs of raw materials. The paper recommends to buy.With gold in such heavy demand as a safe haven, you'd think a gold mining company like Centamin would be having a grand old time, says the Investment Column in the Independent. But, while the gold price is up about 18 per cent so far this year (even after falling about 16 per cent since the start of September), the FTSE 250-listed company's shares are down more than 40 per cent. The miner, whose main asset is the Sukari gold project in Egypt, substantially cut its production forecast for the year in August because of restrictions imposed upon it by local blast inspectors in the second quarter. However, Centamin cheered the market yesterday with news that operations had returned to normal, showing that Centamin is back on track in a gold market where the price is likely to remain high for some time to come. This makes the shares well worth a punt. Buy, says the Independent.BCPlease 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.