Thursday tips round-up: ARM, De La Rue, Enquest

30th May 2013 07:24

Shares of ARM have slid lately. The immediate catalyst has been broker commentary suggesting that the share price of the 'poster child' of Britain's tech sector had overreached, but the real worry is Intel, its arch-rival. Industry 'chatter' indicates that one of ARM's biggest clients - Samsung - may be about to launch a new tablet designed to run on the American firm's chips, which would allow Intel to finally begin to claw back some ground versus ARM. However, with its new Chief Executive and given that the British outfit is a proven performer investors should remain confident that it will stay two steps ahead of Intel. Hold on for now unless it keeps falling, says The Times's Tempus. Quiescent inflation just won't do, investors in bank note printer De La Rue need a little instability. Nevertheless, while rampant inflation is nowhere to be seen and no one expects the birth of a new country any time soon, according to data from the International Monetary Fund the annual growth of money in circulation in some geographies continues to be in the double-digits. Even so, De La Rue and a clutch of other firms must fight for the left-overs from state-owned print-workers. Even worse, its commercial French and German competitors have generated overcapacity in the sector. Hence, it has been left hoping that central banks may have underestimated demand, says the Financial Times's Lex column. Oil and gas producer EnQuest - the largest independent player in the North Sea - yesterday announced another acquisition as it continues with its strategy of diversifying away from that basin. Yes, there is there is the risk that it will overpay for assets. Nevertheless, it is targeting an increase in output to about 50,000 to 60,000 barrels of oil over the next seven years, up from 22,802 in 2012. As well, trading on a 2013 earnings multiple of 9.4, falling to 7.2, its valuation does not seem overstretched. For these reasons The Daily Telegraph's Questor team keeps a buy. 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