Friday tips round-up: Petrofac, Anglo American, Unilever

23rd Oct 2009 06:32

Full-year earnings at oil services group Petrofac will be up by "at least" 20% as the company continues to win new orders, the company said yesterday.The shares are trading on a December 2009 earnings multiple of 17.7 times, falling to 13.2 next year. This is at a significant premium to some rivals, but this premium is probably warranted, but after such an impressive rally since March, the stance on the shares - for now - is hold says the Telegraph.Petrofac benefits from a low tax rate ? just 12% in engineering and construction in the first six months of 2009 thanks to its skew to low tax jurisdictions ? which may not persist. At less than 2%, the prospective dividend yield is slight. But Petrofac also boasts the fastest projected earnings growth of any of its peers. Hold on say the Times.Anglo American announced a raft of changes yesterday, that included the divestment of a number of businesses and a restructuring of its senior management team, which it reckons will save in the region of $120m a year. That, coupled with a reasonably upbeat production report is encouraging news and suggests that the company is on the right track. But Anglo remains Xsrtata's top bid target. Any hint of underperformance and it will move. Whichever way this goes, investors should win. Buy says the Independent.Sceptre Leisure supplies fruit machines, lottery tickets and other games to pubs. In a relatively unconsolidated industry with some disarray among competitors, Sceptre is in a good place and is growing quickly. Trading on 18 times next year's earnings it's not cheap. But iff it can resolve its debt issues, Sceptre is a decent bet. Buy when it does suggests the Independent.Newspaper and magazine circulations may remain under pressure but business at Smiths News has never been better. Smiths is now sitting on an £8bn order book ? not bad for a company worth barely more than £200m. At 122¼p, nine times earnings, the shares are worthing owning for the 5.6 per cent dividend yield alone. Buy says the Times.Smiths' market remains tough and confidence is low, but sales are beginning to pick up. The group is on a 5.9% yield as it upped the dividend yesterday. It trades on 8.9 times forecast earnings, according to Altium Securities, and those earnings look to be relatively secure. Buy adds the Independent.South Buckinghamshire Council has called a halt to the plans of Pinewood Shepperton to build a £200m 100-acre set adjacent to its existing site. A weak US dollar will work in its favour. But at 135p, or 18 times 2010 earnings, the shares are best avoided says the Times.Unilever is one company that fits the bill for investors looking for growth in emerging markets. The group generates more than half of its sales in emerging markets. This proportion is likely to rise in future years. The strategy of moving into these high-growth markets is sound. The shares are trading on a December 2009 earnings multiple of 16 times, falling to 14.4 next year, which seems reasonable. The current yield is 3.8%. 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.