Thursday tips round-up: Punch Taverns, BAE, N Brown

15th Oct 2009 06:04

Punch Taverns only trades on 6.4 times 2010 full-year earnings, which is hardly expensive. But given the business's problems, it's hard to say that it deserves a better rating. Even if its turnaround measures start to bear fruit, the question is whether an enormous, impersonal chain can ever really effectively run an "important cultural component of social life in Britain". The Campaign for Real Ale appears to think not and nerves are jangling about its super complaint over tied beer prices that the Office of Fair Trading will soon rule on. There have been suggestions that shareholders would be better off with a break-up. The Independent agrees. Time gentlemen, please. Sell.The investment case for BAE remains sound. The shares are yielding 4.7pc and are trading on a current-year earnings multiple of 7.9 times. This is at a discount to US defence company Lockheed Martin, for example, which is valued on a 2009 multiple of 10 times. Once the SFO situation is rectified the shares will be re-rated. Now is a good time to buy, according to the Telegraph.N Brown has resumed the payment of a rising dividend ? up 13 per cent on an underlying basis ? having kept the payout flat at the full-year stage. The company also flagged its ability to loosen the credit restrictions that it imposed on customers at the start of the credit crunch. At 257½p, or 11 times current-year earnings, and yielding 3.9 per cent, the shares remain a buy. Times.Meanwhile, the Independent likes N Brown's caution over the last 12 months and thinks the dividend yield of four per cent is enough to keep punters interested in the meantime. Buy.Dana Petroleum has a good portfolio of exploration assets and its production growth profile should boost the bottom line significantly over the next few years. The shares are trading on a December 2009 earnings multiple of 36 times, which is undeniably high, but this falls to 17 next year, then to 14.9 in 2011 and 9.9 in 2012. Therefore, on balance, the Telegraph has decided to maintain a buy stance.Two months after Cisco Systems called the bottom of the IT downturn, South Africa's Datatec, a London-listed distributor of Cisco equipment, made much the same point. At yesterday's half-year results, the company talked of a clear "inflection" in trading at Westcon, its biggest division, during June and July, with sales in the US and some European territories starting to improve. Buy on weakness, says the Times.Air Partner is not an airline. That much is evident from yesterday's full-year results, which showed that the Gatwick-based company was actually profitable in the 12 months to July 31. At 597½p, a 5.1 per cent dividend yield is clearly appealing. However, a steep forward multiple ? of 27 times current-year earnings ? suggests there will be better times to buy, writes the Times.The Independent adds that after maintaining the dividend - paying it largely out of strong cash reserves - Air Partner yields an impressive 5.7 per cent, which is well worth having until earnings and the shares turnaround. HoldPlease 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.