Wednesday tips round-up: Sage, Games Workshop, Arm

29th Jul 2009 06:43

Business software group Sage still looks solid enough, with good cash flows, and a cost-cutting drive to salvage margins. The group also pointed out that companies were not yet ditching contracts or trading down.The multiple of 11 times brokers' estimated earnings in 2009 looks about right, with a solid dividend yield of 4.2%.Hold says the Independent.Provident Financial is a company that is very hard to like. It sells high-interest loans to low-income groups - Barnado's, in a damning report, has highlighted rates of up to 500%, and has complained to the Office of Fair Trading. Provident has had a number of problems in the past, but has ironed many of them out. The forecast multiple that the shares sit on - 11.7 times 2009 earnings - is not overly demanding, while the prospective yield - 7.4% and likely to rise - is attractive. Buy if you can stomach it says the Independent.Games Workshop still has room for expansion, not least overseas. The shares have reflected this over the past few months, and now sit on a rating of 16 times next year's forecast earnings. That's steep but justifiable if the company can continue its run. Hold for the moment, but buy on weakness says the Independent.Further upgrades for Games Workshop may ensue. But at 309p, up 73% on the year, the shares now trading at a full 16 times current-year earnings. Short-term investors should take their pieces off the table. Sell says the Times.Randgold Resources is on track to meet this year's production target of 490,000 ounces. If the company continues to use its paper to snap up assets like Moto, growth should accelerate even further over the medium term. Shares in Randgold remain a buy says the Telegraph.As with all chemical companies, Croda cannot see too far ahead. But it is a big player in a fragmented market, it throws off plenty of cash and its principal end-market ? mid-range cosmetics such as Boots' Protect and Perfect range ? is proving resilient to economic downturn. At 550p, or ten times next year's earnings, and yielding 3.8%, buy on weakness suggests the Times.Croda's dividend is covered around twice by earnings. The shares are trading on a December 2009 earnings multiple of 11.2 times and are up 40% since December. Buy says the Telegraph.If there was a disappointment in chip designer Arm's latest numbers it was that, rather than raising current-year forecasts, it simply reaffirmed them. This suggests that the shares, at 128¾p, a heady 27 times 2009 earnings and up 40% on the year, have run far enough for now. Pass 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.