Thursday tips round-up: Capita, Mothercare, Vodafone

19th Nov 2009 06:12

It is too soon to tell whether the City's underlying fear ? that Capita's years of consistent double-digit growth are ending ? will be realised. However, in the interim, professional investors may prove unwilling to pay 721¾p, or 17 times 2010 earnings, if that trajectory is in doubt. For that reason, take profits, writes the Times.Mothercare's stock is pricey, trading on a price to earnings ratio of more than 17 times. The watchers at Investec are doubtful, arguing that investors should hold fire: "We struggle to justify the current valuation, which, even post upgrades and allowing for cash balances, trades at a premium to all bar the most extreme recovery stories in the sector." The Independent takes the point, but do not share the concerns. Buy.Vodafone's shares are trading on a March 2010 earnings multiple of 9.3 times, falling to 8.9 in 2011. The cash generative abilities of the world's largest mobile group and its prospects in new markets means the stance on the shares remains buy, according to the Telegraph.Exploration on Melrose Resources' South Mardin blocks in Turkey is set for 2011. There has also been progress in the Black Sea, the company's other big region, although elections in Bulgaria and Romania have delayed schemes that are dependent on government approval. However, it has received the go-ahead for its Kavarna sub-sea gasfield in Bulgaria and should shortly do so for neighbouring Kaliakra, which, when producing next year, will provide an additional boost to cashflow. At 356¼p, or 11 times next year's earnings, buy on weakness, says the Times.Hill & Smith's shares are trading on a December 2009 earnings multiple of 9.2, falling to 8.7 next year, the stance on the shares remains buy based on the group's international profile and the full impact of stimulus money on US roadworks next year, says the Telegraph.Finding your way around the equity market in the last year has been almost a tricky as navigating the Tottenham Hale one-way system. Investing in Trafficmaster could have helped in both respects. The analysts say buy, but do point out that there is a timing risk in closing some large fleet contracts that could damage revenue prospects this year. The Independent would also have concerns about car sales next year when the Government's popular scrappage scheme runs out of money. Hold.A grey November day might not seem the most fitting time of year to unveil technology used to detect melanomas ? but that was the case at Biocompatibles, the small-cap drug delivery specialist, which yesterday announced the acquisition of MoleMate, a screening tool used by dermatologists and doctors to assess moles more accurately than by conventional visual examination. But it is on the development of the company's two key products ? for liver and colorectal cancer ? that its fortunes depend. With trial progress, and a maiden profit, expected next year, at 239p, hold on for more, according to the Times.It always comes as something of a surprise that Close Brothers still exists, at least as an independent entity. On a rating of 13 times expected full-year earnings, falling to 10.9 times next year, the shares are not overly expensive, though. Buy, says the Independent.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.