Sunday Tips round-up: Electrocomponents, Pennon, BTG

19th Jul 2009 10:27

The Sunday Telegraph has upped its stance on distributor Electrocomponents to buy from hold.Based on current forecasts the shares are trading on a March 2010 earnings multiple of 14.3 times, falling to 13.5 in 2011. The yield of 7.1%is well worth having - and this yield is based on expectation of a 1p cut in the dividend.Should we see a recovery in the rest of this year, then the dividend may not be trimmed. In this rosily optimistic scenario, the shares would yield 7.8% - but don't bank on this. However, on balance and because once market conditions improve the share should recover strongly, the stance is buy the paper says.On Thursday, regulator Ofwat will let water companies know how much money they are allowed to make and what their spending commitments need to be over the five-year period starting 2010. Pennon shares yield 4.8%. They are trading on a March 2010 earnings multiple of 13.2 times, which does not appear too demanding, so the stance remains buy says the Sunday Telegraph.Randgold Resources shares are trading on a heady current-year multiple of 69.5. Gold companies tend to trade at a high rating, but this earnings multiple reflects future production growth. Its prospective multiple in 2010 falls to 34 and then it moves down to 22 in 2011. Shares in Randgold remain a buy says the Sunday Telegraph.BTG is the only biotech stock fund manager Andy Brough of Schroders holds in a large size, he writes in the Mail on Sunday. While it is difficult to value the combination of revenue from royalties, the cash in the bank and the large product portfolio, it has the potential to be a portfolio changer without the normal risk of a one-product biotech stock with little cash. Brough says he would add to his holding below 150p.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.