Friday tips round-up: SABMiller and Avon Rubber

23rd Nov 2012 07:27

The Times' Tempus column has recommended to 'hold' shares of beverages giant SABMiller after the group warned of slowing growth in the emerging markets, a key growth driver for most drinks companies. The paper's Martin Waller says that the 'cheers are finally beginning to fade'.The company said yesterday that first-half lager volumes rose by 4%, but the rise of 5% in the first three months moderated to just 3% in the second quarter."In each of the three growth territories, Latin America, Africa and Asia Pacific, the second-quarter growth rate fell to as much as a third of that in the first," Waller noted.He says that the drivers behind emerging market growth are still there at SABMiller, "including the demographic trends and the ability of the big drinks companies to persuade the newly affluent to trade up to more expensive brands."However, the stock, now trading at almost 19 times earnings, is at a premium to the sector. "That assumes a degree of further growth that may be hard to achieve. Hold," Tempus said.Meanwhile, Avon Rubber, a provider of respiratory protection to military and industrial markets, has been marked as a 'buy' by The Telegraph's Questor column, which says that they have further to bounce following its full-year results earlier this week.The company revealed continuing profit growth, debt reduction and the dividend was increased by a fifth despite challenging markets, the paper said. "Investors should be very pleased with the group's progress," said Questor's Garry White.One of Avon Rubber's markets, defence, is currently subdued but White says that the medium-term prospects for the firm are "sound" with threats from unconventional warfare and terrorism increasing around the world. Meanwhile, its dairy business - the company produces rubber products used in the milking process - is benefitting from a growing world population.White said: "The shares are up 16% since their recommendation a year ago and, trading on a current year multiple of 11 times, remain a buy."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.