Thursday tips round-up: Sage, Rightmove, BBA

5th May 2011 06:28

Sage makes software for small and medium-sized enterprises, allowing them to keep track of the books. Revenues fell by 5% the year before last and were pretty well flat last year, although they began to pick up in the second half. The shares are on almost 15 times' this year's earnings, hard to justify while further organic growth will be slow. Hold for now; wait for developments, is the Times' advice.There are ways to play the housing market - and the property website Rightmove is one of them. The company, which charges estate agents for listings on its ever-more popular web pages, boasts an enviable position in the online property sector. Rightmove trades on multiples of nearly 25 times forward earnings, says Altium, which last night lowered the stock to sell for that reason.However, though we agree that the shares aren't exactly cheap, we do not think the multiples are so prohibitive as to warrant such a bearish stance, particularly in light of the strength of the business. Hold, says the Independent.It might seem perverse, given the environmental and economic pressures we face, but the private jet business is going from strength to strength, growing by an average of 4 to 6% a year throughout the airline cycle. This year BBA Aviation placed a £80m bet that this growth would continue. BBA raised £86m, the equivalent 10% of its existing equity, to fund future growth. The shares are selling on about 12 times' this year's earnings, having come off a bit since the start of the year. An interesting buy on any further weakness, if you believe the aviation market has further to go, says the Times.Tim Martin, the chairman and founder of JD Wetherspoon, believes that pubs should be invested in and that the offer to customers should be kept competitive rather than running them down as cash machines, that now is the time to invest in buying pubs and that Wetherspoon shares, not too far from where they were a year ago, are undervalued. On about 12 times' this year's earnings, he may have a point, if you believe his expansion plans are the right way to go, says the Times.Henderson Group's first-quarter trading statement had no real surprise for investors yesterday. Assets under management of £60.5bn at the end of the period were 1.9 per cent down from the quarter before. Royal Bank of Scotland analysts have the combined group trading on 12.9 times its forecast for 2011 earnings compared with a mid-cycle margin for listed asset managers of 15 times. That leaves scope for the Henderson to continue attracting new funds, to outperform expectations on fund outflows from Gartmore and to reap the benefits of the merger. Buy, says the Independent.Few punters outside the industry may have heard of Spirent, the UK telecoms-testing group, but its clients include big names such as Alcatel Lucent, Verizon and Cisco Systems. The group put out its first-quarter numbers yesterday, which revealed pre-tax profits had risen by over a tenth, driven by demand for its services. Numis has Spirent on an ex-cash price of 16 times estimated full-year earnings which it said "feels like growth at a very reasonable price". Buy, says the Independent.Hyder Consulting is a multi-national engineering and design consultancy. The company has designed some of the world's most-famous landmarks, including London's Tower Bridge, Sydney Harbour Bridge and the Taiwan High Speed Railway. The yield is not especially generous given that the dividend would be covered around four times on forecast earnings but the share's recent weakness brought on, perhaps, by the flooding in Australia and the tensions in the Middle East, could be an opportunity. 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.