Thursday tips round-up: Kier Group, DS Smith, Standard Life

25th Apr 2013 07:26

The terms of construction services group Kier´s buy-out offer for May Gurney appears to constitute a significant improvement on the Costain bid. It is 25 per cent larger and has a cash element worth 50p a share too. Further, a transaction would reduce the former´s dependency on construction while strengthening its product offering in the services space. As well, the transaction more than meets its target for return on capital employed. It very much looks like a "knock-out" offer. Nevertheless, "await developments," says The Telegraph´s Questor team. Recycling and packaging firm DS Smith´s buy-out of Swedish outfit SCA last year is turning out quite well. Thanks to that purchases its revenues were up 90% and cost synergies from the deal are now expected to be greater than initially planned for. As well, that acquisition added certain defensive traits to its business model while allowing it to enter several important markets in Northern Europe. Even so, the shares are trading on an April 2014 earnings multiple of 14.3, falling to 11.1, and yielding a prospective 3.8%, rising to 4.3%. That looks pretty full, despite the fact management are delivering. Hold, Questor says. "Tuck away for the long-term," that is what The Times´s Tempus believes that his readers should do with shares of Standard Life. Yesterday´s first quarter trading update from the insurer was well ahead of expectations and there seems to be further room for growth following the introduction of compulsory workplace pensions, or auto-enrollment. Just as important, the company´s turnaround - executed under Chief Executive David Nish - is a clear success story. Simply put, the company is ahead of the pack and has been for some time now in many respects. Hence, despite the fact that the stock has done well already, if you buy the growth story then stay put, Tempus explains.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.