Sunday tips round-up: Bunzl, Entertainment One, Yule Catto

12th Jun 2011 15:43

"You wait ages for a bus to come along - and then three turn up at once. A bit like acquisitions at distribution group Bunzl," writes The Sunday Telegraph this weekend, referring to the company's three recent acquisitions, Spanish firm King Espana Completos, UK outfit SIG Safety and Workwear and the Australian group Hospitality Depot. In the opinion of the newspaper's Questor team, at 12.3 times estimated earnings and with a dividend yield of 3.1% the company's shares are a 'hold' at these levels. Its arguments in favor of that position are three: investors who got in on the original tip of 571p, back in December 2008, would have seen shares rise by 36%, they would be locking in a prospective yield this year of 4.5% and the company is well managed and its strategy is sound.The Daily Mail's Midas column, for its part, this Sunday touts shares of TV and film producer Entertainment One. Although Midas admits that the company's shares are not without risk it does see potential in the company's share price for long term investors. In particular, Midas points out the success of the company's children's TV series Peppa in the UK, its entrance into the US market and the recent signing of a marketing deal with US toy manufacturer Fisher-Price. Analysts cited by the newspaper believe that the potential size of the US market for Peppa merchandise could be of as much as £600m. Also to be had in account, film releases over the coming 12 months will include The Ides Of March, directed by George Clooney, and the fourth chapter of the Twilight Saga film series, Breaking Dawn. Furthermore, since its financial yearend in March Entertainment One has completed the acquisition of Hopscotch, an Australian film distribution group, which will extend its geographical presence in several markets. For Midas shares of Entertainment One are a Buy.Specialist chemical company Yule Catto is being tipped as a Buy this Sunday by Questor. In favor of the company's shares The Sunday Telegraph highlights the fact that a third of the company's sales are in the fast-growing Asian market. More important in Questor's opinion, however, is the company's pricing power, which allows it to compensate for cost pressures, even if with a lag. Also with positive implications, the company has signalled that demand for its products is solid. In fact, good demand is apparently being seen for Latex in central Europe and volumes are growing in its Malaysian nitrile facility. Also worth noting, apparently, the company's acquisition of PolymerLatex means that," sales are expected to pass £1bn in the current year for the first time," and substantial synergies are expected. Lastly, the shares do not appear to be trading on a stretched earnings multiple, indeed the shares are at a discount to other players in the sector, Questor adds, pointing out as well that, "In the year to December Yule is trading on a multiple of 12.9, falling to just 9.1 next year. This compared with Croda on 16.5 this year, falling to 15 in 2012."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.