Friday tips round-up: AB Foods, Premier Oil, Croda

10th Jul 2009 06:42

John Bason, finance director at AB Foods, says that Primark has changed the face of retailing on the high street. And who can disagree, after Primark posted a 21% jump in sales in the quarter to 20 June, especially with many competitors slipping into administration. There was similarly good news in the sugar business - ABF markets Silver Spoon sugar - while grocery sales were also up. Bason argues that changes to EU rules on sugar will help sales next year. Hold says the Independent.Centaur Media, publisher of titles like The Lawyer, issued a trading statement yesterday saying that its markets would remain challenging for the foreseeable future. Centaur needs the advertising market to improve. Sell says the Independent.Premier Oil has production of 50,000 barrels a day providing steady cashflow, a strong balance sheet, and scope for more opportunistic deals in the North Sea and Asia akin to Oilexco. The shares, at £10.50, or a 25% discount to most estimates of net asset value, are a buy says the Times.Hedge fund manager Man has been battered during the financial crisis, with the share price falling by 60% in the last 12 months. The group told its AGM yesterday that things are changing: private investors provided net inflows of $1.9bn, while institutional outflows fell to £3.3bn, a much better performance than in recent months. Tentative buy says the Independent.Profit warnings supposedly come in threes. So, on the evidence of Computacenter, do profit upgrades. Yesterday the IT reseller increased its earnings forecasts for the third time in six months. Full-year pre-tax profits are expected to be in the region of £48m, £10m higher than at the start of the year.Part of that rerating reflects the transformation of Computacenter's business: a shift away from its traditional low-margin niche of reselling computer hardware towards the provision of higher-margin services. But that switch has coincided with a recession that has pushed more companies in Computacenter's direction. But the shares are up 131% this year and on the principle that big profits should be taken where they fall, 206½p looks a good point to sell says the Times.The problem for Begbies Traynor is that the insolvency work is not coming in as fast as last summer's share price, a forward rating of 22 earnings, would suggest. But history tells that insolvency work keeps flowing long after a recession has ended. The average case duration ? about three years ? also indicates that Begbies will be busy for some years to come. At 99½p, or 11 times earnings, hold on says the Times.The investment case for chemicals group Croda still stands. The group manufactures chemicals for the health care sector, the cosmetics industry and herbicides and insecticides. The company also owns a number of patents for its products, which is important. A significant part of its business is consumer care products and therefore defensive, but it is also leveraged to a global recovery through its industrial operations. A 2009 earnings multiple of 11.2 times, falling to 10.2 in 2010, does not appear too demanding - although it is not cheap. A buy at this level suggests the Telegraph.Design engineer Aveva shares trade on a current-year earnings multiple of 15.3 times, falling to 14.7 next year and the yield is just 1.4%. Until there is an improvement in the company's underlying markets, the shares are unlikely to be re-rated higher, but the business is solid and the company has already made significant investments in its products, so it can cut back on development expenditure. Hold says the Telegraph.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.