Friday tips round-up: Hansteen, Playtech, Unite Group

30th Aug 2013 07:10

The recent purchase of the Ashtenne fund out of administration by property fund Hansteen amounts to a big bet on UK industry and yet the stock market seems to have completely missed the benefits of this deal. Perhaps critically, the team at Hansteen knows Ashtenne property portfolio as they were the ones who sold it back in just 2005. To boot, they have acquired it at a 30 per cent discount to book value. The vacancy rate on those properties is 18 per cent you say? Indeed, but finding tenants is precisely Hansteen´s bread and butter. Further, the company will earn fees from Aviva for managing the portfolio. Lastly, sporting a 4.9 per cent forecast dividend yield The Daily Telegraph's Questor thinks the shares are worth a look. Buy, it says. Playtech has done quite well for itself this year with its share price having risen by 60% year-to-date. Further, the sale of a 29% stake in William Hill online netted the outfit €492.4m (£420m), over thrice the amount of money which it invested initially, contributing significantly to the cash pile which the company is now standing on - of €576.2m. Hence, a special dividend seems a possibility. Further acquisitions or joint ventures are also on the cards. However, Playtech did not give any clues yesterday about its takings from the Ladbrokes venture so far. The fact that the stock is trading at ten times' next year's EV/Ebitda [Enterprise value/operating profits or earnings before interest, taxes, depreciation and amortisation] multiple means that value remains in the shares despite the strong share price performance. It might be worth adding a little while the price is off its peak of 717p, but only if confident about the fate of the tie-up with Ladbrokes, The Times's Tempus writes. If one is looking for property exposure Unite Group may be the place to look. The company provides student accommodation, especially around London. The company's borrowing costs have been falling just as rental incomes stabilise. In parallel to the aforementioned the company has a pipeline of development projects. Its portfolio yields a steady 9% to 10%, while its average cost of the debt was 5.3% during the first six months ended June, down from 5.5% in the previous period. More important even, Unite expect 30,000 more students to start university this academic year and this view was supported by official UCAS figures. Yet its Chief Executive sees a structural shortage of supply in the wider market remaining, with only 9,500 new student rooms being built this year. What you are paying for here is the growth prospect, and that doesn't look unreasonable, The Daily Telegraph's Questor team believes. Buy, it says. 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.AB