Thursday tips round-up: Gem Diamonds, Bowleven

16th Sep 2010 06:31

If London buses tend to come in pairs, then so does the good news for Gem Diamonds. Yesterday, it was that the company had negotiated a 25 per cent price increase for the rocks it sells to the jewellery group Tiffany. Sadly, for investors, all this good news has not translated into a solidly rising share price, with Gem's stock falling by more than 20 per cent in the past six months. The analysts at Panmure Gordon reckon that with Gem shares now trading 19 per cent below the group's deferred cashflow valuation, the stock should scale the heady heights of 240p. We would be less confident and see few catalysts to get the price moving, especially after yesterday's upbeat news did not translate into any momentum from the market. However, it might now be worth holding a few, suggests the Independent.Bowleven, the West Africa-focused oil and gas prospector which announced the start of drilling operations at the Sapele-1 exploration well in Cameroon, has a had pretty good year so far, with its shares up more than 80 per cent since the beginning of January. RBS reckons that further news on Sapele-1 should be forthcoming around late November or early December. City scribblers seem in agreement over the fact that a positive result here could be transformational for the company. But this suggests to us that the stock may struggle to make gains until the market receives confirmation either way.That said, we'd hold on to the shares because Bowleven is also unlikely to give way in the intervening period. First, the fall in price since August seems unjustified and if the stock does not make a full recovery, the shares should remain firm at the very least. And second, Bowleven is often mooted as possible bid target. Sector peer Afren was recently named as possible suitor. Such chatter should provide further continuing support to the share price until we hear more on Sapele-1. Hold for now, says the Independent. Aqua Bounty Technologies does not like being labelled as the "Frankenstein fish" company, but its business of genetically modifying salmon means it is hard to escape the tag. The company modifies Atlantic salmon by injecting a gene from the Chinook salmon, so they grow much faster. The business case for investors comes down to whether the US approves the fish for public consumption, which would be a major milestone. Indications yesterday were good and it could be the first genetically modified livestock to be approved. The problem is it won't ship until the beginning of next year, and as Nomura noted, the revenues for the whole year are likely to be negligible. With cash burn of $5m (£3.2m) a year and profits unlikely for three, it's too risky. Sell, 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.