Sunday tips round-up: Surgical Innovations, National Grid, Utilities

7th Aug 2011 14:51

Investors, "have a genuine appetite for risk and are looking for low-priced shares that may not pay out dividends but are expected to deliver good growth over the next few years," the Midas column at the Financial Mail on Sunday writes, and Surgical Innovations neatly fits the bill. The Leeds based company designs and manufactures specialised instruments, primarily for use in keyhole surgery. Crucially, the outfit has pioneered a number of innovative devices, including 'Resposable' products, which are partly disposable and partly reusable. These instruments cost about a quarter of the disposable alternatives. Additionally, the company run by Graham Bowland is present in the world's largest healthcare market, the United States. The global market for keyhole products was estimated at £3.25bn in 2008, and is expected to grow at annual clip of 7% until at least 2015. The company could see revenues and profits soar. Midas says Buy. National Grid, the gas and electricity network company, has operations all over Britain as well as a considerable presence stateside, in New York and New England. The firm was the target of much criticism last year, following an unexpected £3.2bn 'capital call'. Nowadays, however, National Grid is "reasonably secure", believes Joanne Hart, at the Financial Mail on Sunday, despite plans to spend about £30bn over 8 years upgrading its gas and electricity systems. Crucially, the company is committed to a generous dividend policy. It is expected to deliver 39.3p next year, giving it a 6.7% dividend yield, one of the best on the FTSE 100. Simply put, "National Grid is a solid business with a carefully considered plan for the future." Midas says buy and hold. For the Questor team at the Sunday Telegraph the current situation is, "very reminiscent of the 2008/09 plunge at the height of the recent crisis, albeit this is a crisis of government solvency rather than banking solvency." In turn, the above has led to a mass sell-off where everything has fallen, the good assets and the bad. Questor thus believes that now is actually a great time to buy quality companies at what could be a bargain-basement price. Do you believe that the "line has been crossed" and a total economic collapse is in prospect? That is what gold bugs have been predicting, but Questor is hopeful that the sovereign debt crisis will be resolved. Eventually. That's why Questor thinks the best investment strategy is to continue to drip-feed funds into the market - and this is especially the case when markets are falling. Sectors of particular note now are Insurance and Utilities, with National Grid having the highest dividend yield among the latter. Vodafone is also very cash generative and globally diversified. It has an attractive yield as do tobacco groups. Questor believes all those shares are a Buy. AB