Friday tips round-up: Astra, Croda, Clinton Cards...

28th Oct 2011 06:52

AstraZeneca faces an upcoming threat in the form of generic copies of Pfizer's Lipitor cholesterol treatment in the US, notes the Investment Column in the Independent. This will present a challenge for Astra's Crestor cholesterol drug, which has been selling well. Yesterday's results showed its sales had climbed 14 per cent in the third quarter. But Crestor could lose some steam as the generic comes onto the market. So those are the challenges. Weighing against this is the fact that the stock is not exactly pricey. At around nine times forward earnings, Astra offers value and a very decent prospective yield of more than 5 per cent. In the end, this continues to look like a good investment - but not so good as to prompt us to increase our holdings. There are challenges, though none so severe as to warrant a "sell" view. Hold, suggests the paper.Mike Humphrey, chief executive of Croda International, is retiring after 42 years with the chemicals producer, and he reckons that now is the most exciting time he can remember, says the Tempus column in the Times. It has to be said that for much of its recent history, this business, which started life in 1925 as a maker of lanolin, has been fairly dull. What Croda has been doing mirrors the strategy of other successful British export businesses. It is dumping less profitable lines that cannot compete with producers in less-developed economies, while building up higher-margin product that can. The market has recognised this progress, and there is a bit of bid premium in there too, as Croda has long been seen as a target for a larger overseas industrial group. The shares, off 61p at £18.21½, are on about 15 times this year's earnings. One to tuck away, recommends the paper.There were no happy returns for Clinton Cards, the greetings card retailer, yesterday, notes the Investment Column in the Independent. The 641-store group posted a calamitous loss of £10.7m for the year to 31 July, hit by falling sales and impairment charges to property, plant and equipment, as well as onerous leases. However, Clinton shares leapt after it unveiled a refinancing of its £55m debt facilities to July 2013. We have concerns that Clinton relies on third-party suppliers for its cards, with 80 per cent coming from eight suppliers. This means the group has far less room for manoeuvre on margins than its highly profitable rival Card Factory, which makes its own cards. While the new boss may prove us wrong, we think he has a mountain to climb. Sell, recommends the paper.The newly relisted APR Energy will probably have to put up with being compared with larger rival Aggreko for as long as they both operate in the same market, the provision of short-term energy supplies, says the Tempus column in the Times. Between them, APR and Aggreko have an estimated 25 per cent of a market that can only grow; the global imbalance is rising by about 50GW every year, according to a recent study. Aggreko had about 3,600MW at the end of last year, set to rise to 5,000 MW by the end of 2012. APR has 800MW and the financial resources to expand this to 1,300 MW over the same timescale. One difference is that APR's fleet is made up of dual-capacity gas and diesel plant, which it claims to be more efficient. The shares sell on about 18 times earnings ? a touch higher than Aggreko's rating. A good growth story but, at this level, no need to chase now, the Times says.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.