Thursday tips round-up: Smiths Group, Man, FirstGroup

1st Oct 2009 05:53

Smiths says that it has felt a pick-up in some markets since the end of its financial year. Second, cost-saving measures, including tighter management of working capital, have done much to mitigate recession. It was relief that full-year profits were no worse that sent the shares up 6 per cent. But investors face less vigorous advances from here. At 888½p, or 13 times earnings, and yielding 3.8 per cent, the shares should be held, says the Times.Man Group, the largest listed hedge fund in the world, peaked at 628.4p in July 2007 but after a bumpy ride it slumped as low as 158p in March this year. However, Man is looking up now, which was confirmed by a bullish trading statement yesterday. Numis said Man's stock was trading on a price to earnings ratio of 17 times estimated 2010 results, falling to 10 times the following year. The share price rose considerably following the announcement, but there should be a further distance to go. The Independent says 'buy'.FirstGroup on Wednesday reminded investors just how tough things are out there, when it updated the market ahead of its half-year results in November. The company, which runs buses and trains in the UK and US, has felt the pinch as consumers cut back on non-essential travel and workers have stopped going to work. But overall the statement showed how resilient FirstGroup is, even in difficult circumstances. At 10.5 times forecast earnings, yielding 5pc, the shares are still worth a punt, the Telegraph says.Shares in AIM-listed wind farm developer Renewable Energy Generation surged 33 per cent after it agreed the sale of its Canadian operations to International Power for £69 million in cash. UK electricity prices remain weak, and the planning process for onshore wind farms subject to protracted delays. But, at the very least, yesterday's deal suggests that the stock market's valuation of wind farm capacity and that of prospective buyers remains out of synch ? as underlined by this year's rejected bid approach for REG. Buy on weakness, says the Times.The online fashion retailer Asos has been one of the darlings of the recession: its profits, sales and share price have rocketed as others struggled. Trading on a 2009 price-earnings rating of 27.6 times, the stock is not the cheapest and, with no dividend, investors who hold their nerve and buy at these levels will have to hope for an appreciation in the share price. Nonetheless, we would still be buyers of Asos shares, says the Independent.Wichford was supposed to sit at the low-risk end of the commercial property sector. This small-cap investment company buys only buildings let to central government under long-term leases, such as Jobcentres, courts and the Passport Office, which means that its rental income is highly predictable and the risk of void properties is low. The longer-term hope is that rising property prices and easing credit markets make further rights issues unnecessary. At 11p, where it yields 5.5 per cent, this is a high-risk "buy", reckons the Times.After a year of woe and upset for the property sector, investors may be encouraged by St Modwen's update yesterday. According to analysts at Numis, St Modwen already trades at a premium to the sector, albeit justifiably, and the shares will climb just another 20p in the next year. Conditions are better, but with the group saying 2010 could be tough, the Independent is inclined 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.