Share tips: Rolls-Royce, Drax, Rightmove, TalkTalk

28th Jul 2013 16:11

Innovation will help drive sales at Rolls-Royce as jet fuel costs increase, regulation of airport noise tightens and aircraft makers build larger models, The Daily Telegraph's Questor says. The need for quieter, more efficient engines and increased airline traffic from emerging markets will boost the company's civil aviation business, which makes up about half of revenue. The company is also seeking to become more efficient itself to boost margins. Investors should not be too concerned about the Serious Fraud Office's probe into Rolls-Royce's sales practices in Indonesia and China, Questor says. Despite the shares hitting a series of highs this year, Questor maintains its buy rating.Drax is going green to shed its position as Europe's biggest polluter but the owner of Britain's biggest coal-fired power station faces challenges, the Sunday Times's Danny Fortson writes. The overhaul includes a £700m conversion of three of its six boilers to run on wood from the US - a plan Fortson thinks is bound to hit problems. Drax also faces a hit to profits from UK's and European carbon taxes. At its first-half results on July 30th, broker Charles Stanley expects profits down by a third to £102m. After the shares rose by a third this year to 645.5p Fortson says take profits.Resurgent house prices have lifted Rightmove shares and bolstered the online property listings company's already bumper margins, Fortson says. The government's help-to-buy programme, which supports homebuyers without big deposits, will be extended beyond new builds in January. That is a recipe for still higher property prices and more profits for Rightmove, Fortson says.TalkTalk is shedding its reputation for poor service and focusing on growth opportunities, the Financial Mail on Sunday's Midas column says. The phone company's boss, Dido Harding, has injected retail know-how into service and is expanding into mobile, TV and business offerings. Updating the market on July 24th, Harding said customers were spending more and staying longer and was upbeat about prospects. Some analysts think the company could announce a special dividend to distribute cash to investors. With a distinctive offering to customers who want the basics, service on the up and costs falling, the shares are a buy, Midas 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.SF