Friday tips round-up: Mothercare, WH Smith, Standard Chartered...

15th Oct 2010 06:40

Yesterday's second-quarter trading update from Mothercare was rather a mixed bag with the majority of the good news due to the babycare retailer's "rapid" international growth.The UK retail market was still "uncertain" and the City was taking a guarded view of the company's prospects. The retailer's progressive dividend policy also remains attractive, particularly with interest rates still in the doldrums, so hold on to the shares, says the Independent.Yesterday's spike in the WH Smith share price was more about the £50m maximum the company plans to spend on a share buyback than some better than expected results. For now, the shares trade on about 10.5 times earnings. This is an attractive rating for one of the most defensive stocks in the retail sector, though the usual caveats about consumer spending remain, the Times writes.Standard Chartered has got ahead of the competition, is securing the capital to support growth, has highly-respected management and a track record of which any bank would be envious. For those reasons alone, investors should take comfort that the rights are worth buying, The stock may be expensive but the rights are a buy and if the price drops precipitously on regulatory concerns, there's still headroom to sell the rights at a profit, the Telegraph reports.Booker, which runs more than 170 branches supplying convenience stores, restaurants, pubs, schools and prisons, made a pre-tax profit of £36.9m in the 24 weeks to 10 September. With a reasonable, if not terribly exciting, dividend yield of 2.7%, the Independent is just about convinced. Buy.Rio Tinto is still one of the best plays on continued growth in the Chinese economy. Brokers say that Rio is also the cheapest of the big miners, on about 5.8 times next year's earnings, a fifth cheaper than BHP. A long-term buy says the Times.The trading update from Clinton Cards is so downbeat that one wonders if they think the man in the red suit with the reindeer will be calling at all. For the year to August 1, revenues remained flat at £337m, operating profit from the core chain was up 11 per cent to just short of £17m but the Birthdays Retail chain, bought back from the administrator, slumped into a £1.56m loss after unexpected problems with the supply chain. Given the uncertain outlook, no reason to chase says the Times.Probability, the mobile phone gambling business, announced some fancy numbers in a trading statement, together with a move to Gibraltar. The fact that the total cash deposited by players into gaming accounts last month was 27.1% higher than in April, while the total wagers placed in September were 54.9% higher than in April, was good news for the company. A speculative buy says the Independent.Bodycote shares surged on Wednesday after the coatings group said it expected operating profits for the year to be towards "the upper end" of analysts' forecasts, which were £40m to £49m. The company now looks expensive. It is trading at 21 times 2010 earnings and 15 times 2011, yielding just 2.7% this year and 2.9% next. The short lead time Bodycote gets from customers means it can beat expectations, but the time to reinvest may have passed says the Telegraph. Avoid.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.