Friday tips round-up: Investec, Savills, Aegis

19th Mar 2010 06:45

Shares in Investec, the South African lender with a dual listing in London, have gained 26% since the start of the year ? a performance that will see it promoted to the FTSE 100 index for the first time next week. Overall, Investec has risen more than threefold in value since floating over here in 2002.Bad debt charges and impairments to Investec's loan book should soon start to slow. The group will benefit strongly from any rises in base rates; it has lost about £100m in annual revenues due to the paltry returns it currently makes from cash on deposit, while it is also seeing strong growth in asset management and private banking. At 12 times next year's earnings, and yielding 3.4%, hold on says the Times.Estate agent Savills has come through the downturn in much better shape that its peers. It has cash on its balance sheet ? some £66m at the end of last year. It also still pays a dividend. Even so, at 359p, the shares, up 20 per cent over the past three months, trade at a full-looking 24 times 2010 earnings. Look to buy lower down says the Times.Aegis, the marketing group which issued annual results yesterday, has also been mentioned, with the usual story of a deal with its French rival Havas (which shares a common shareholder in the form of financier Vincent Bollore) doing the rounds. A tie-up with Havas may still be forthcoming. But even if it isn't, Aegis is strong and trades on an undemanding multiple of 14.6 times Investec's full-year estimates. Buy says the Independent.Raymarine has been granted an extension, until September, on its debt pile. It is still unable to comply with financial covenants, but was working with creditors to find a resolution. Decisions now rest with the banks, who will act in the interest of debtholders rather than equity backers. Sell says the Independent.Asia-focused oil explorer Salamander was the second biggest faller in the FTSE 250 yesterday, but that had more to do with its issuance of $100m of five-year convertible bonds. With arbitrageurs selling stock in order to hedge their positions in newly-bought bonds, the shares dropped 6%. At 264p, up 117% since the start of last year, it is tempting to lock in gains. However, positive sentiment ahead of the next set of drill results may provide a further leg up. Hold says the Times.Bakery chain Greggs plans to open 50 to 60 new stores this year, having identified 600 potential new sites for a bakery. The company has also opened a number of "concept shops" in the South of England to tempt a more upmarket customer to buy its range of pastry goods. The shares trade on a December 2010 earnings multiple of 13.4 times, falling to 12.4 in 2011. Buy says the Telegraph.GlaxoSmithKline shares reacted well to the possibility that the launch of a generic version of Advair may be delayed beyond the expected launch in 2012. In 2009, the inhaled asthma treatment generated about £5bn in sales for GSK, The main reason to own GSK shares is for the cash generated by the group and the dividend yield of 5.1%is well worth having. The shares are trading on a December 2010 earnings multiple of 10.5 times, falling to 10.1 in 2011. This looks like good value and, with a solid yield to support the shares, the stance remains 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.