Thursday tips round-up: Serco and Ophir Energy

30th Aug 2012 07:04

The Questor column in The Telegraph may have labelled outsourcing group Serco a 'hold', but has highlighted that while yesterday's first-half numbers were mixed, the underlying message was generally positive for the medium term.The firm's numbers are starting to show evidence of outsourcing opportunities flowing through as a result of austerity measures from governments, which count for 95% of group revenues. Serco won £4.2bn of orders in the first six months compared with £2.5bn the year before. The paper notes that some £500m of these were from the private sector, "an increasing opportunity for Serco".However, with shares trading at 13.7 times 2012 earnings, falling to 12.5 times next year, and the prospective yield is 1.5%; best to stay put for now, Questor's Garry White said.Oil and gas group Ophir Energy has yet to produce and is a long way off turning a profit or paying dividends but shares have risen steadily over the last year, as the Tempus column in The Times noted on Thursday morning.The paper said that there are two reasons for this: first Ophir, along with partner BG Group, announced in March a huge find off Tanzania of about 3.4 trillion cubic feet of recoverable gas; meanwhile, the company is also seeking partners in Equatorial Guinea, Madagascar and Somaliland with proceeds from these likely to add to its $454m cash pile."Against this, a loss of $24.4m halfway, mainly the costs of running the business, look academic," the paper's Martin Waller said.Nevertheless, with the shares having risen from the 250p mark when it floated last summer to around the 550p price recently, Tempus recommends to 'hold'.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