Thursday tips round-up: Stagecoach and Cairn Energy

8th Dec 2011 07:11

The Times's Tempus column assesses Cairn Energy which to say the least has had a mixed time of it. It struck seriously lucky in India, finding significant quatitites of oil, and so agreed to sell 30% of its Indian business for $4bn last year.That money, as Tempus points out, is now in the bank.The trouble is Cairn has spent most of this year failing to find any oil off the west coast of Greenland and has spent $800m doing so. Consequently its share price has dropped (down 34% this year).Nevertheless, Tempus argues that the firm still holds a 22% in its Indian operations worth $2.5bn, there is the $4bn in cash from the sale last year, and a further $600m in reserves. The firm's market cap is a mere $6bn, less than its asset and cash value. Add in the fact there is probably residual value in the Greenland licenses and Tempus thinks, if you're brave, now is a time to buy.The Independent's Sharewatch column looks at Stagecoach, which released half year earnings yesterday. The Indy is impressed that the company managed to overcome rising fuel prices and a difficult economic backdrop to post good numbers.Stagecoach also announced yesteday that it is to invest £44m in its Megabus business. Sharewatch believes this will play out well as consumers, both in the UK and the US, seek ever cheaper ways to travel. With a market cap at 10 times future earnings and a dividend yield of 3%, Sharewatch says buy.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.