Friday tips round-up: Hays, Ryanair, Cape...

7th Jan 2011 06:45

As one of the world's biggest suppliers of white-collar staff, Hays provides a pretty clear indicator of economic trends. Yesterday's trading statement demonstrates this. Asia Pacific is motoring along, having come swiftly out of the downturn last autumn, with like-for-like growth in net fees of 36% in the last quarter. Hays has always been highly rated but the shares, after their gains in the second half, are now on 26 times this year's earnings. Easily high enough for now; buy on any weakness, suggests the Times.Whatever you think of Michael O'Leary, Ryanair's abrasive chief executive, you have to concede that the company has a cracking business model. Trading on a March 2011 earnings multiple of 14.9 times falling to 11.1 next year, the shares do not look especially expensive and remain the preferred airline play. The shares are a buy at this level for the €1bn-a-year free cash flow says the Telegraph.Domino's Pizza has an impressive business model - that's why its shares trade on such a high rating. However, with significant growth in earnings in prospect and the potential for increasing dividends in the future, this rating is deserved. The shares certainly trade at a premium valuation. The December 2011 earnings multiple is a whopping 29.3, falling to 26.2 next year. However, you have to pay for such quality. The shares remain a buy says the Telegraph.Oil services group Cape is in the right spot, well positioned in the Far East and Pacific Rim. The target seems achievable assuming that revenues, at present flat, rise by 12.5 to 15% annually over the next few years. Yesterday's trading statement, though signalling no recovery yet, forecast that this would start to happen in the second half of this year. The shares, on six times 2010 earnings in the summer, now change hands on a more challenging 9.6 times this year's. That re-rating will come in due course, but the shares look due for a rest until 2010 figures come out in March suggests the Times.Mouchel shareholders mulling Costain's bid might not be too keen to dilute their holdings in a pure support services business by exchanging them for those in a company still also involved in pure construction. In addition, though the company has been transformed under its current management, Costain and its investors have had a torrid time in the past, and history sticks. Mouchel shareholders should consider taking profits, especially if they bought in after October's profit warning, such as in December when the shares were bombed out at below 60p. Those in the mood for a gamble should stick around suggests the Times.Markets all over the world started the year on an upbeat note - but this year is likely to be volatile. This volatility should be good for broker Tullett Prebon. The shares are still trading at a discount to the shares of larger listed rival ICAP. Tullett shares are trading on a December 2011 earnings multiple of just 8.3 times, compared with ICAP on 14 in the year to March 2011. The yield is 3.4%, but once the case with BGC comes to its final conclusion it is possible that the payment will be raised. A buy 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.