Friday tips round-up: Savills, Wood Group, McBride

18th Dec 2009 06:42

Savills, the upmarket property company, produced a reverse profits warning yesterday, saying its earnings would be appreciably ahead of expectations. Notwithstanding 50 % top rates and supertaxes on bankers' bonuses, it seems the top end of the property market is holding up rather nicely.The shares should be considered a short-term trading buy, but be prepared to head for the exit if signs of economic weakness put its new found vim under threat says the Independent.Yesterday's trading update from the energy services provider John Wood Group was good news, insofar as it confirmed that its 2009 earnings would meet market expectations of $354.5m (£220m). With a price-to-earnings ratio estimated by Evolution Securities at 9.4 times in 2009 and 11.5 times in 2010, the stock looks very tempting when compared with the rest of the sector. With the real progress not expected until the second half of next year, there is plenty of time to get in on the action and investors should be well rewarded for doing so. Buy says the Independent.Wood's low capital demands and the low-risk nature of its contracts, which are based on reimbursable costs, make yesterday's 288p, or 12 times next year's earnings, a good point to buy, adds the Times.Coal specialist Hargreaves issued a reassuring update in which it said that it expected to meet full-year expectations. The company provides a whole integrated supply chain for the coal industry. Not only does it mine coal, but it transports the fuel to power stations through a fleet of more than 500 vehicles. The company even removes the ash and turns it into paving for footpaths. It is also one of the largest coke traders in Europe. The shares are trading on a May 2010 earnings multiple of 8 times, falling to 7.4 in 2011. Buy says the Telegraph. McBride has rallied with the wider retail sector this year. The company, which makes own-brand products for leading supermarkets such as Tesco and Asda, has seen its share price swell by more than 70% since January. The austrere backdrop bodes well for McBride because its stable of high value but low cost own-brand products provides attractive alternatives for thrifty consumers. Finally, despite the strength in recent months, the stock trades on an acceptable normalised multiple of 12 times Investec's forecast earnings for 2010. Buy says the Independent.Bus and train group Arriva sees opportunity in the estimated €200bn of European transport services that remain in state hands ? which, given budgetary pressures and this month's implementation of new EU competition rules, are increasingly likely to be privatised or put out for tender.But that is a dynamic for another day. At 485p, or ten times next year's earnings, and yielding 5.5 per cent, the shares are up with events. Pass says the Times.When music group Chrysalis agreed to a bank securitisation deal this decade, it also entered into a "cap-and-collar" hedging arrangement to protect itself against future rises in interest rates. The problem is that Chrysalis takes the hit when short-term interest rates fall below 5 per cent ? such that the modest £2.2m full-year operating profit it reported yesterday was overshadowed by a £3.2m loss on its "ineffective" hedge. With interest rates expected to stay low, the company is seeking to terminate the agreement. Newly signed chart successes such as Bat for Lashes, Fleet Foxes and Tinchy Stryder bode well, but at 102p and up 70% since August, there should be better times to buy says the Times.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.