Friday tips round-up: Rio Tinto, ENRC, SIG

21st Aug 2009 06:13

Rio Tinto's earnings were hit in the first half with big losses in aluminium and diamonds while iron ore and copper profits were scythed. But Rio is cutting $1 billion in costs from its aluminium portfolio and the iron ore JV should deliver more cost savings. If you have a patient long-cycle view of the market, Rio is interesting, says the Times.Kazakhstan-based group Eurasian Natural Resources Corp's (ENRC) shares can hardly be described as cheap - they are trading on a December 2009 earnings multiple of 24.7 times. However, this falls to 17.6 next year and 10.7 in 2011. So, looking past this year and considering management's track record, the valuation looks compelling. The company is well managed, it has one of the most enviable balance sheets in the sector and, when earnings jump you can expect a substantial rise in the dividend. For investors with a sensible time horizon, ENRC shares are a buy, according to the Telegraph.There may be a tiny green shoot in insulation with the UK Government's renewed efforts to get the nation to line its lofts, fill its wall cavities and generally save the millions of kilowatts of energy that fly out of our leaky homes. Utility companies shirked on the last scheme, preferring to give away free low-energy light bulbs rather than subsidise thousands of pounds of loft insulation. The next scheme, however, will be focused on insulating homes and SIG is the biggest player in the UK market. That won't be enough to send SIG soaring without a building recovery but SIG's heavy cost base makes it a geared play on extra revenues. Every little bit helps and it cannot get much worse, says the Times.Wincaton is doing the right things, but will continue to find the going tough for some time. The Independent says buy on the strength of the yield.ProStrakan, led by former executives of Shire Pharmaceutical, expects to be in profit by the end of the year with several drugs capable of delivering £100 million in annual sales. The company's cashflow outlook is good and that is reassuring. Buy, says the Times.The key to investing in Cineworld, the cinema operator, is the yield. The group talks about the quality of films produced by the American studios (punters should wait with bated breath for Jim Carrey's version of A Christmas Carol), and the increasing number of movies being shown in 3D as reasons why investors should be excited. For the Independent it is all about the dividend yield, and for that reason it thinks the investment case is compelling. Of course, any return to crippling recession would be bad news, but then so it would be for most other equities too. Buy.TT Electronics, the industrial components supplier, has been caught in the eye of the recessionary storm. The Independent would wait for evidence of improvement in the next set of numbers before buying. Hold.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.