Sunday share tips: Prudential, Diageo, TUI Travel

10th Mar 2013 22:05

Over the last five years Prudential benefitted greatly from its expansion in southeast Asia, as the region´s middle class emerged. Helping matters was the lack of a social safety net and free health services in these countries, which stoked demand for the company´s insurance products. Thus, in the last five years the insurer´s share price has quintupled, with its market capitalisation now twice that of archrival Aviva. At about 1.4 times book value the valuation seems fair enough, given the firm´s growth rate, says The Times´s Danny Fortson. "Yes, the stock is now nearing the firm's target price, but there could still be a little bit of juice left in Pru's share price run," he adds.Since taking over in 2000 Diageo Chief Executive Paul Walsh has brought focus to the company, centering solely on alcohol and looking for growth in exotic places as far afield as Africa, the Far East and South America. The question now, however, is how Walsh will keep alive the winning streak. America seems to be the answer. The company derives about a third of sales from the region and has chosen it as a key growth area for over the next few years, Fortson writes. TUI Travel´s Chief Executive, Peter Long, seems to have hit on a winning strategy, offering an exclusive product at prices that consumers can afford. Not surprising perhaps then that the company has had a strong start to the year and there is room to grow if the firm succeeds in gaining ground in markets such as Belgium, Holland and France and cold emerging markets such as Russia and other Eastern European states. Furthermore, the firm is increasingly sourcing clients on-line. "TUI shares have had a good run lately, but there is plenty more mileage in the stock," says The Financial Mail´s Midas column. 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.AB