Sunday tips round-up: BHP, Northumbrian Water, Group NBT, wine

3rd Jul 2011 13:57

A growing number of connoisseurs are buying wine not simply to drink but to make money, writes Midas in the Mail On Sunday. Potential investors do not have to spend thousands of pounds on a single bottle to participate in this market. Instead, they can use the services of specialists such as Vin-X, Berry Brothers & Rudd or Bordeaux Index to build what is effectively a diversified portfolio of wines. Customers can, for instance, use Bordeaux Index, as an upmarket off-licence or they can use it like a fund manager, giving the firm a set sum of money to invest over a period of years, typically between two and five. The investment can be tracked through a constantly updated online index, much like the FTSE 100. Like all investments, when it comes to wine, knowledge is power. Good merchants should know which wines are growing in popularity and which are lagging behind. Investors should also be able to sell their stock with ease, so good wine funds should have access to quality stock and be prepared to buy it back.The world's largest miner, BHP Billiton, has spent $3.64bn buying 93.9m shares in London since November. It also said it had spent $6.34bn repurchasing 146.9m Sydney-listed shares through a tender offer. The repurchase of the Sydney-listed shares represented 4.4% of shares listed on the Australian Stock Exchange. Should no suitable acquisitions occur, even more money is likely to returned via buy-backs, writes Questor in the Sunday Telegraph. The shares are trading on a June 2012 earnings multiple of 7.9, falling to 8.1 next year, and the yield is 2.4%. They were tipped as a buy on January 1 2009, at £19.95 and they are now up 23% compared with a FTSE 100 up 30%. The shares remain a buy, in Questor's view.In January 2008, Midas tipped Northumbrian Water in the Daily Mail, suggesting it was an obvious bid target for an infrastructure fund. We have waited three-and-a-half years but finally the tide is turning. Last week, Cheung Kong Infrastructure Holdings (CKI), an investment company controlled by billionaire Hong Kong tycoon Li Ka-shing, confirmed it was looking at a possible offer. For investors who bought at 350p, it may be tempting to sell some shares now. Given CKI's other water interests, any formal bid would almost certainly be referred to the Competition Commission so delaying the takeover. Nonetheless, it would be foolish to sell completely so early on. This story will doubtless continue to develop and Li Ka-shing's putative offer may even prompt attention from others.Recently, the floodgates were opened for the naming of web pages on the internet - and this is positive for registration and internet management company Group NBT, according to Questor in the Telegraph. NBT manages domain names for blue-chip clients, as well as internet hosting and corporate protection services. It has posted growth and revenues every year for the past decade and is active in a market that is growing at about 6% a year. The shares are trading on a June 2011 earnings multiple of 16.7 times, falling to 14.7 in 2012. This is a premium rating but it reflects the recurring nature of the group's revenues, the relatively bullish backdrop and the group's blue-chip client base. The yield is not spectacular at 1.1%. Questor first recommended the shares as a buy on March 12 2009, at 214½p and they are up 109% since then compared with a FTSE 100 up 61%. The shares remain a buy, in Questor'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.