Friday tips round-up: Rolls-Royce, AB Foods, Britvic

13th Jul 2012 07:00

Garry White from the Questor column in The Telegraph has labelled engineering giant Rolls-Royce as a 'buy', following its recent wins at the Farnborough Airshow."Questor likes the Rolls-Royce model because the company continues to make money out of its engines after they have been sold, through its TotalCare long-term service agreements." Underlying service revenue accounted for more than half of total group sales in 2011.The shares trade at 15.1 times current-year earnings falling to 13.6 next year and the prospective yield is 2.3% rising to 2.6%. While the stock has risen 5% since Questor's last 'buy' call, the column still stays positive.The Tempus column in The Times likes the look of Associated British Foods, the food ingredients group and Primark owner. The paper notes sthat third-quarter sales at the "cheap-and-cheerful" clothes retailer were up by 13%, while other retailers have been hit by the recent bad weather. What's more, Primark's footprint in the European market seems to be expanding rather well.Meanwhile, retail isn't actually the best performing division in AB Foods, with the sugar business growing sales by a whopping 54%, helped by higher production in the UK and Spain and high prices. The performance of other divisions, such as agriculture and groceries were less stellar.However, while the group is expected to see pre-tax profits jump 16% to just shy of £1bn this year, the column says that the shares are approaching 15 times this year's earnings. "I might be tempted to take a few profits here, but they remain a solid long-term 'hold'," writes Martin Waller.The Questor team from The Telegraph says that this week's profit warning from soft drinks group Britvic - associated with the recall of its Fruit Shoot products - has presented investors with a buying opportunity with the shares now standing close to its 230p flotation price in 2005.After this week's decline, the paper says that the prospective yield is a "very nice" 6.5%, rising to 6.8%. What's more, Questor spoke to the group's Chief Executive Paul Moody yesterday and he said that there was currently "no reason to believe the [dividend] will be cut"."Questor thinks that the shares are a 'buy' for recovery, although investors must prepare for a slight dividend shock. Once that uncertainty is out of the way, a rerating is likely."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.BC