Friday tips round-up: Invensys, Easyjet, BHP Billiton...

21st Jan 2011 06:45

What has driven the Invensys share price in recent months, though, is bid speculation, especially after some unfortunate remarks in November by the chief executive Ulf Henriksson that its Chinese rail partner might be interested.Though these were swiftly played down, a break-up still looks a possibility. After yesterday's fall, the shares now sell on 15 times this year's earnings. Any move on the rail front could provide some impetus again; any further weakness looks like a buying opportunity suggests the Times.EasyJet has one advantage over its bigger rivals. It is a growth stock, adding new planes and taking market share most recently from national carriers in France and Italy. But those higher fuel prices will continue to weigh on the sector as a whole. On less than nine times annual earnings it appears appear cheap but anyone thinking of taking the risk should be prepared to bale out in the event of further turbulence, suggests the Times.Since the Queensland floods, BHP Billiton shares have declined by almost 8%. Almost half of this came yesterday on news that Queensland coal production was off by 30% in the last three months of 2010 against the previous quarter. The company, though, remains the most diversified miner on the planet, with potential assets stretching forward for decades, having provided shareholder returns totalling 206% over the past five years. Stick with it says the Times.BHP is extremely cash generative at the moment - throwing off more cash than it needs for investments, dividends and operating costs. It is likely to increase its share buy-back programme. After the failed hostile bid for PotashCorp last year, the company is also likely to use its cash to make purchases. The oil and gas sector is a likely area for BHP to consider using its cash reserves. The shares are trading on June 2011 earning multiple of 10.1, falling to 9.9 next year. The yield is 2.5%. Buy says the Telegraph.Mining giant Rio Tinto posted a record production report this week - with output of iron ore of particular note. With commodity prices at such elevated levels this is very good news - especially when it comes to that all-important cash flow. The shares are trading on a December 2011 earnings multiple of 7.9 times and yielding 1.3%. Buy says the Telegraph. Kenmare, which operates the Moma titanium mine in Mozambique, posted a very good set of production numbers yesterday. Not only is production on track to expand by 50%, but it has also managed to secure "significant" price rises for the current year. Legacy contracts are expiring and new contracts will be put in place. The shares are trading on a December 2011 earnings multiple of 20.6, which is undoubtedly high. However, as production increases, the multiple hits 6.5 in 2013. Buy says the Telegraph. St James's Place is making a habit of beating expectations. The wealth manager reported yesterday that assets under management surged by £5.6bn to £27bn in 2010. They've doubled over the past five years. The uncertainty about Lloyds's 60% stake and what might happen to it is worrying investors, but the shares trade at a substantial discount to the estimated net asset value and are cheap. Buy says the Independent.Enterprise Inns suffered a hangover after the snow forced many consumers to cancel parties and quaff their tipples at home over Christmas. Enterprise trades on just 4.4 times forecast full-year earnings, the bulk of its £2.92bn net debt is secured till 2032 and it continues to hive off the tale of its estate at decent prices. Buy says the Independent.Euromoney - whose publications including Euroweek and Hedge Fund Intelligence - posted a 20% uplift in its first-quarter numbers yesterday. Subscription revenues, the largest part of the business, rose by 13% between October and 19 January compared with a year earlier. Advertising was up 24% and sponsorship up 39%. Euromoney is a solid business but the value of 15.5 times estimated full-year earnings looks about right, so hold for now says the Independent.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.