Thursday tips round-up: London Stock Exchange, Rio Tinto

17th Jul 2014 07:39

The Tempus column in The Times says it is "waiting for a clearer picture to emerge" at London Stock Exchange. While Wednesday's first-quarter trading update showed that the exchange operator is operating well, with progress made across its three biggest divisions, "uncertainties remain", the paper said.Tempus said the market is still no clearer on the terms of the rights issue that is being used to part-fund the $2.7bn acquisition of Frank Russell. Meanwhile, given that Frank Russell's fund management business doesn't fit with LSE's existing operations and will likely be sold off, details about a potential sale have not yet been released."LSE shares, up 31p at £19.77, are at the top of their trading range and do not suggest much more than a hold until a clearer picture emerges," the paper said, giving the stock a 'hold' rating.Meanwhile, the Questor team at The Telegraph has labelled mining giant Rio Tinto as a 'buy', saying that the shares "are a good long term bet as iron ore prices stabilise on resilient Chinese growth figures".Questor highlighted the firm's strong second-quarter performance from its iron ore division, which generates 89% of group earnings. After record iron ore output in the second quarter, it believes the future is bright as Rio continues to expand mines in the Pilbara area of Western Australia and improve rail infrastructure for shipments.The stock trades on 11 times forward earnings, failing to nine times next year, and with an estimated dividend yield of 3.8% Questor reckons the shares should rise in the future. "The investment case is still largely a commodity bet on China, but with the added benefit of a decent dividend to boot."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.BC