Thursday tips round-up: Smiths Group, ENRC, Bellway

25th Mar 2010 06:33

Forget all the fuss about what you can or can't see through an airport full-body scanner ? a clear picture was provided yesterday by a company that makes these devices, as Smiths Group released first-half results. Chief executive Philip Bowman's overhaul of Smiths through the creation of a series of world-class franchises ? especially in detection and interconnectors ? is worth seeing through. At £11.56, or 15 times 2010 earnings, and yielding 3%, hold on says the Times.The FTSE 100-listed Kazakhstan-based miner, Eurasian Natural Resources Corp, yesterday said that it was looking to leverage its balance sheet to as much as two times earnings to fund acquisitions. The group is in the right markets and is looking to ramp up production, while the demand for its produce is high. Trading on a multiple of more than 20 times 2010 forecast earnings means that the shares are not cheap, but back the stock to continue to grow. Buy says the Independent. Mitchells and Butlers, which has a total of 1,948 pub sites, wants to open smaller format Harvester and Toby Carvery outlets in locations that generate high footfall, such as retail parks. It also plans to improve margins and trim its chunky debt. Partly by consolidating costs in its food supply chain, M&B estimates that it can add about £30m by reversing the gross margin erosion it has suffered over the last three years. Concerns over the anaemic recovery in consumer spending remain, however. Hold says the Independent. The battle for defence service company VT Group is finally over - and Babcock's sweetened offer has won the day. There are arguments that the new Babcock will be strong and more focused after the complicated merger process is completed. However, investors don't go broke taking a profit and mergers can always present unforeseen problems. Therefore, VT shareholders should sell the shares received from the takeover and bank the gains, the Telegraph says.Bid target Gulfsands 2009 results are out on Tuesday next week and they should show good progress and an increase in output - the current consensus forecasts. Gulfsands tabled its first significant profit at the interim stage and the second half should have been better than the first. Buy says the Telegraph.It did not take the Budget's rise in stamp duty threshold to lift shares in Bellway. Yesterday's first-half figures from the mid-cap housebuilder gave them their own momentum: pre-tax profits, net cash and dividends for the six months to January 31 were all higher than expected. Bellway expects to be developing 200 sites this time next year (one fifth of them on land bought cheaply since the onset of recession), which implies it will be able to increase sales and margins faster than its peers. But at 760p, up 40½p ? or a 9% discount to last reported net asset value ? the company's shares are up with events, the Times says.Housebuilder Bellway's 10% dividend rise is a sign of confidence. Bellway has also raised its expectations for home sales this year (to 4,600) and said it expects to step up land buys (it has a cash pile of £72m). Bellway is in decent shape and the shares should reward investors who continue to hold them says the Independent.CPP Group is built on worry. The York-based company sells policies that cover consumers against the loss or theft of keys, credit cards, passport or mobile phone ? or even their identity by online fraudsters. At 260p, the shares trade at 14 times 2010 earnings (which are forecast to grow 15% in 2011), and provide a near 3% dividend yield. Buy on weakness says 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.