Thursday tips round-up: Mouchel, Centamin Egypt, Hambledon...

23rd Dec 2010 06:31

When Mouchel Group on December 6 announced it had received takeover approaches, various names were in the frame, including fellow outsourcers Serco, Mitie and Carillion. No one mentioned Costain. An authoritative note from broker Peel Hunt after the bid approaches were revealed suggests any bidder could offer 156p a share and still get a 10 per cent return on their investment, even before any cost savings, in the first full year after a purchase. With the shares currently on eight times earnings for this year to the end of July, investors have the option to take profits but might consider staying in for the long haul, suggests the Times. Even by the standards of the mining sector, Centamin Egypt's update this week was opaque, which may explain why it took several analysts a while to get to grips with it. Centamin, a stock followed, if not necessarily understood, by a legion of private investors, too, owns one goldmine in the desert that started production only at the beginning of the year. Centamin is a fascinating if risky play on the gold price. There are other factors, including, inevitably, the political risk that the Egyptian Government may require a larger slice of one of its few resources assets. One for the bold, thinks the Times. Hambledon produces gold from the Sekisovskoye deposit in east Kazakhstan. Mining is from an open pit but the company is developing an underground operation that should come on stream in 2011, when annual production will reach more than 100,000 ounces a year. Hambledon Mining is obviously not without risk. But forecasts point to a pre-tax profit figure of around £22.5m by 2012, which - if achieved - would put the stock on a prospective price-to-earnings ratio over that time scale of less than two. For those of a courageous bent who are prepared to accept the risks that are intrinsic with such a proposition, the company could be worth analysing further. The Scotsman says 'buy'.It is good to know that we still lead the world in some technologies. Zotefoams is apparently the biggest cheese in foam, of the sort you find in cricket pads, footballs and, well, anything using foam, much of it made at its head office in the improbable environs of Croydon, South London. Shares sell on a surprisingly high multiple, 16 times this year's earnings, because of its strong market position, those growth prospects and a dividend yield for this year in excess of 3 per cent ? not bad for a growth stock. If to your taste, one to tuck away and forget for a while, reckons the Times. 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.