Friday tips round-up: Tesco, AstraZeneca, Standard Chartered

9th Dec 2011 06:46

The Telegraph's Questor column takes a look at a familiar name, Tesco, the UK's largest retailer.Yesterday it revealed the fourth quarter of reduced like-for-like sales in the UK. Its new boss Philip Clarke admits this isn't good enough and the Big Price Drop strategy was an attempt to tempt in new customers. So far it hasn't really worked but Questor argues by next year, with inflation falling, it will.Elsewhere the group has struggled with floods in Thailand but this is seen as a temporary problem. Like-for-like sales at the US division: Fresh n Easy were up 11.9% in the third quarter, compared to 12.4% for the second. This is a key metric as the US business is yet to turn a profit but forms a big part of Tesco's strategy.Nevertheless, with backing from Warren Buffet, no less, and the earnings ratio falling to 10.1 next year Questor maintains the Tesco is a buy.The Time's Tempus column ntakes a nuanced look at the FTSE 100 drugs company AstraZeneca which has issued two interesting announcements in the past week. The first, a defensive measure, was a cull of a quarter of its US sales team. This is a tacit admission the company doesn't have as many new drugs to sell as its previous world beaters fall out of licence.On the other hand, yesterday, Astra announced its purchase of a Chinese maker of generic drugs. This has obvious advantages as it exposes the AstraZeneca name to an enormous market and probably increases the margin the company can achieve on generic sales simply by levering its brand image. While the main weakness of Astra, according to Tempus is its lack of strong compounds coming down the research pipeline, it is trading at around six times forward earnings so may, just, be worth a punt.The Independent assesses the emerging markets bank Standard Chartered which yesterday reduced its profit forecasts. Despite this the Sharewatch column maintains the company might well be "the best bank in the world".Earnings growth is exceeding expense growth so margins and profits will rise as Standard Chartered continues to make loans in Asia.The fly in the ointment is the Eurozone crisis which may be diluting Asians' appetite for risk and so could slow StanChart's irresistible rise. It's market cap is 1.8 times the current book value of the company when, as the Indy points out, most other banks are trading at a discount. But that is still only 11.6 times forecast full year earnings. Sharewatch says hold, for now.bsPlease 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.