Sunday share tip round-up: Dechra, Aveva, Persimmon

6th Nov 2011 17:27

The first three months of the financial year started well at animal health-care group Dechra. Revenue in the first quarter is 7.7% ahead of the same period last year, whereas consensus for the current year is for revenues to rise 4.7%, so this result looks good. Particularly heartening for The Sunday Telegraph´s Questor team, the 64.1% year on year rise seen in US sale after last year´s acquisition of DermaPet, in Florida, which gave the company access to several new products and enlarged its footprint in the US. In the UK, there are about 8m dogs, 8.4m cats and 1m horses. In the US there are 75m dogs, 82m cats and 10m horses. This highlights the potential scale of the business across the Atlantic. In Europe, things improved too, with revenues growing 10.5%. The shares are trading on a June 2011 earnings multiple of 12.9 times, falling to 11.6 in 2012, and currently are yielding 2.4%. For Questor the shares remain a Buy.Cambridge-based Aveva makes software that creates lifelike, 3D designs of complex projects that do not just show what the end-product will look like, but offers advice to users as well. The company was spun out of Cambridge University in 1967 and originally focused on providing technical advice to shipbuilding firms. These customers still contribute between 10% and 20% of revenues, but the bulk of Aveva's business now comes from the oil, gas and power industries. Aveva Net compartmentalises every detail in a straightforward way and lets customers know when parts may need to be serviced or replaced. Engineering projects are increasingly complex and Aveva's technology helps to make construction and maintenance more accurate and less risky. Profits are expected to rise steadily over the next few years and interim figures in mid-November should be encouraging. The shares at 1625p may seem expensive, but Aveva's long-term prospects are good. Buy, says the Financial Mail on Sunday´s Midas column. "Will the housebuilders ever get a break? Trading updates from two of the country´s biggest, Persimmon and Bovis Homes, will give us a good idea on Tuesday," writes The Sunday Times. The general expectation: not bad, but not particularly good. The British Bankers´ Association last week revealed that mortgage lending had slowed for the first time in five months in September, not surprising for the end of the summer. The figures were a 7% improvement on last year but they are crawling their way back from a pretty low base. Both Persimmon and Bovis are worth roughly a third of what they were in 2007, when Northern Rock was still churning out 125% mortgages to all and sundry. Even so, it is heartening that Barclays last week started offering 90% mortgages for the first time in three years. The market is loosening, but slowly. (...) Persimmon is perhaps best placed to take advantage of the long march back. (...) But that doesn´t change the inconvenient truth that, today, not many people are buying new houses.ABPlease 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.