Friday tips round-up: WH Smith, Costain, SABMiller

16th Oct 2009 06:45

WH Smith is no longer just a defensive play, as the innovative ways that chief executive Kate Swann has found to expand the format into workplaces shows.The yield is a respectable 3.5%, but trading on 11 times next year's earnings - before yesterday's rise - the shares are at a discount of about 15% to the sector average. While the chief executive remains, the shares are a buy says the Independent.The Times adds that WH Smith continues to find additional cost savings (a further £14m were outlined yesterday) while its steady retrenchment from CDs and DVDs ? now just 6% of group sales ? looks smarter by the day. At 517½p, or 12 times earnings, hold on.Costain is one of those companies it is difficult not to like. All the things that normally put investors off - bad numbers, poor trading, a hugely inflated price earnings ratio, it's a bank - do not apply to Costain, and investors that have not already cottoned on to the story should be dialling their broker. At these levels, the stock is beginning to look a little pricey, but it is still a buy says the Independent.Kedco does renewable energy, and has identified 30 projects - five of which have full planning and permitting granted to Kedco and/or its partners, with one under construction for electricity generation by the end of 2009. Kedco specialises in gasification of wood and wood waste, together with anaerobic digestion of either food or agricultural waste. Those willing to take a punt could do worse. Speculative buy says the Independent.The long-term allure of the brewer SABMiller's emerging markets exposure, combined with the prospect of 50 per cent profit growth over the next three years, means that £16.42, or 13 times next year's earnings, is no point to cash in. Hold says the Times.Hovis maker Premier Foods' cash generation is improving, but the slow pace at which the company is likely to pay down its £1.4bn of borrowings limits the attractions for now. At 41½p, or seven times earnings, pass says the Times.There will be a cyclical recovery in Aggreko's business and the structural shortage in power globally means the long-term prospects for this business are stunning. However, the valuation is up with events and the rating remains hold suggests the Telegraph.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.