Thursday tips round-up: Renishaw, RSA, Cookson

27th Jan 2011 06:31

Niche engineer Renishaw's halfway statement to January 26 yesterday was full of superlatives. First-half revenues were 26% higher than their previous high point and pre-tax profits were 132% higher. Numis Securities calculates £72.2m in profits this year against less than £30m last time, which puts the shares, after yesterday's 263p rise to £15.98, on more than 18 times earnings. High, but any shares that become available should be tucked away, says the Times.Last week, insurance group RSA said that it will miss its profit target for the year because of damage caused by freezing conditions. But the shares are still yielding 6.5pc. Last week, the group said it would maintain its plan to increase the dividend in line with inflation - and the bad weather hit would not change this policy. Buy for the income, says the Telegraph.The rebound in the world's steel and electronics markets bodes well for Cookson, the industrial materials group which issued an update yesterday. Prevailing strength and punchy targets promise to underpin gains in Cookson's shares, which also boast an undemanding rating. In fact, they are positively cheap, trading on multiples of less than 10 times forecast earnings for this year, according to Evolution. Buy, says the Independent.Meanwhile the Times says that Cookson, which makes ceramic and other equipment that goes into steel plants, has been seen as heavily dependent on a highly cyclical industry. It had the misfortune to buy another industrial company, Foseco, just as the economy went into recession, leaving it with debts of more than £400 million. It has pledged to raise earnings over the next three years by double-digit rates. The shares are on less than ten times 2011 earnings. Every indication is that they have a way further to run once the market catches up, says the paper.African oil company Afren was being a little disingenuous when it announced yesterday that it expected to be producing oil this year at a level of 40,000 barrels equivalent a day. In September it forecast 55,000 barrels. The mismatch is down to delays in bringing on stream its star Ebok field in Nigeria. But it is not a significant problem and the delay is set to be made up by the end of the year. Afren shares have almost doubled since the middle of last year and closed last night at 143.9p. No reason to chase for now, says the Times.WH Smith, the book and stationery chain, wrapped up the Christmas-trading statements of listed retailers yesterday and refused to blame the dire weather last month, although this will have contributed to group underlying sales falling by 5 per cent for the 21 weeks to 22 January. More importantly, gross margins were ahead of expectations with costs "tightly managed" to combat the tough trading conditions. Of course, like other retailers, it faces a tough year on the high street and is firmly in the line of sight of the supermarkets and Amazon. But it remains a decent bet, says the Independent.There has been good news and bad news over the past year for System C Healthcare, which offers IT systems and services to help to rationalise hospital records. The good news for the company was the procurement process for NHS contracts opened up. The bad news, was the Government has slashed spending and been winding up the National Programme for IT, hitting the company's service revenues in the first half of the financial year. Yet, the company has cash on the balance sheet and its enterprise value is 5.2 times earnings before interest, taxation, depreciation and amortisation, according to Daniel Stewart. There should be some upside. Buy, says the Independent.Imperial Innovations invests in and commercialises a range of healthcare, energy and environment technologies and businesses. Investors should have no illusions when considering Imperial as a prospect. The business model is built around technology developed at Imperial College, London, and, by the very nature of the beast, will involve investment at the very earliest stages of corporate development. The risk dimensions are self-apparent but for the right patient investor, this could be worth further examination. Buy, says the Scotsman.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.