Friday tips round-up: ICAP, Compass, Finsbury Foods

1st Oct 2010 06:07

Icap's shares took a fall yesterday, largely because its failure to do anything more than meet expectations after rallying sharply since February's 40 per cent slump. The recent development of an electronic market for euro interest rate swaps, by some measures the world's biggest financial market, is a statement of intent and a testament to the vision of Icap and boss Michael Spencer in particular. Investors who follow Spencer will be repaid long-term. Arguably, these shares are undervalued, so buy, says the Independent.The Times agrees. The lack of visibility into the second half means analysts' forecasts are a long way apart ? £333 million to £357 million. It will be somewhere between, and a middle view puts the shares on about 12.5 times this year's earnings. The shares have been rising of late and are a long-term hold at this level, but a buy on any further weakness, it reckons.Having hit a 12-month low of 362p at the back end of 2009, Compass's shares have rocketed to a high of 574.5p this year. Overall, we remain supporters of the caterer, which has invested £220m in acquisitions this year. But we think that with its shares trading on a forecast 2010 price to earnings ratio of 15.3 investors may want to wait for them to cool off before tucking in again. Hold, according to the Independent.The Times notes Compass shares, after a strong run through 2010, are on well up with events.And it doesn't like Finsbury Foods much. Management may be doing the right things but food companies are out of favour and Finsbury's shares trade cheap ? at only four times earnings ? for good reason. Avoid.Regal Petroleum is another one to steer clear of, reckons the Independent. The Ukraine-focused exploration company yesterday admitted poor results from key wells and a spat with the Ukrainian government's Minister of Environmental Protection. All that and chief executive David Greer resigned with immediate effect. There'll be a strategic review, but how long improvements might take is anyone's guess. Now is not the time for bargain hunting. Avoid, the paper 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.