Friday tips round-up: Unite, Aggreko

7th Mar 2014 07:20

Student accomodation provider Unite is asking shareholders for another 100m pounds to back its expansion plans, including in Newcastle and Edinburgh. They deserve it, says The Daily Telegraph´s Questor team. To take into account, full year pre-tax profits actually rose last year if a one time gain registered in 2012 is excluded. As well, profits from its rental portfolio grew as did the cash generated from the same. Net asset value increased by 9% to 382p per share and the dividend raised by 20%, giving a forecast yield of 1.2%. Buy, says Questor.Aggreko´s business model means that should demand fall off then it is not required to spend as much on manufacturing new plant. Last year capital spending dropped by half as demand from emerging economies took a hit as a result of volatility in currency markets, while demand from the American military and Japan decreased. That allowed for a sharp reduction in debt levels and for the return of £200m in cash to shareholders. Hence the rise in the company´s shares. However, further growth will require emerging markets to come back and a renewed increase in investments. At 21 times earnings the company´s price-to-earnings multiple seems too rich for now, The Times´s Tempus says. 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.