Thursday tips round-up: J Sainsbury and Tullow Oil

10th Nov 2011 07:21

The Telegraph's Questor column takes a look at J Sainsbury, owners of the eponymous supermarket chain. Sainsbury released some fairly impressive numbers yesterday which included underlying profits just ahead of expectations in a tough economic environment.The other aspect of yesterday's update that has caught the eye of Questor is the property strategy of Sainsbury, which is determined to increase total floor space from which it can extract more earnings. Normally, increasing floor space is simply a process of buying lots of land but Sainsbury is also increasing space at existing stores and this is having a big impact on the crucial retailing metric: like-for-like sales.Add this to the fact J Sainsbury has a current yield of 5.2% on a slightly depressed share price, which beats both Morrisons and Tesco, and Questor thinks this stock is a buy.The Times' Tempus column takes a long hard look at Tullow Oil, the oil and gas exploration company. As the paper describes, the firm has not had the best of times recently, having got mixed up in an irksome tax dispute over the sale of its interests in Lake Uganda. Tullow is still waiting for $2.9bn that the transaction should provide but won't see a penny until it agrees a tax bill with the Ugandan authorities.The company has also downgraded production numbers at its facility in Ghana and news from its speculative drilling operation in Liberia suggests the operation may have been a red herring. As a result Tullow's share price was down 5% yesterday which may tempt some but Tempus points out that the current price of just shy of £13.60 is not far of the firm's peak. Tullow, Tempus argues, is therefore not a buy until it can provide the market with some good news from the 40 or so wells it plans to drill in 2012.BS 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.