Sunday newspaper tips round-up: Unilever, African Barrick, 4imprint

16th Oct 2011 19:26

Anglo-Dutch consumer goods giant Unilever is often seen as an undynamic company but Questor in the Telegraph notes that its shares hit an all-time high on Friday, after it unveiled a deal to buy Russian personal-care company Concern Kalina. The price looks good, at 11.7 times earnings before interest, taxes, depreciation and amortisation, with the consumer products giant paying an average multiple of 12.11 for deals in the last five years. Questor put a hold rating on the shares when worries about cost inflation started to emerge. However, this is not so much of an issue now. Also, its recent results have shown the doubters that the emerging markets growth story is still intact and Unilever had the ability to pass on the majority of cost price rises. The current price earnings multiple in the year to December is 15.4, falling to 14.1 next year, and the prospective yield is 3.7pc, rising to 4pc next year. The shares are once again a buy, in Questor's view.FTSE 250 gold miner African Barrick is on Thursday set to unveil sparkling third quarter results. Analysts expect net income of $99m (£63m), more than twice the $40m it made a year ago, writes Danny Fortson in the Sunday Times. With America muddling its way through a tepid recovery, Europe's banks in crisis and China cooling, this safe-haven investment looks set fair for some time yet, in Forston's view. There are risks, however, such as the possibility of Tanzania introducing a mining super-tax, plus the danger of interruptions to electricity supplies at the company's mines. African Barrick is Tanzania's biggest user and the country's system is stretched. Rationing in other countries, namely South Africa, has caused huge problems for power-hungry mining operations. Broker Numis, though, is confident the company has the issues well in hand. It raised its price target to 800p, a long way from the 545p it closed at on Friday. Suppliers of promotional goods tend to be one-man firms selling a few hundred pens or T-shirts to local companies, but 4imprint is different, sending out thousands of catalogues listing hundreds of different products. Over the past six years, sales have grown at a compound annual rate of 14 per cent, while the rest of the market, hit by economic turmoil since 2008, has barely moved, notes share-tipper Midas, which rates the shares a "buy". A third of 4imprint's sales come from Britain, but the rest come from America and that is where the group expects to derive most of its growth. Last year, 4imprint delivered sales of £200 million, profits of £10million and a dividend of 13.7p. In 2011, the group is expected to produce profits of about £12.5million and a dividend of 14.5p, rising to £14million and 15.2p in 2012. Some analysts are even hoping for a special dividend over the coming months because the company generates lots of cash and is virtually debt-free. With a mere 2% share of a fragmented market, there is plenty of scope for growth in Midas's view. --jhPlease 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.