Tuesday tips round-up: Amlin, Goals Soccer, SDL

2nd Mar 2010 06:44

In common with its sector, underwriter Amlin will struggle to replicate 2009's strong investment returns. With about half its portfolio sitting in short-dated government bonds or cash, the best hope lies with the company's ability to take advantage of any rise in interest rates. At 404½p, the shares trade at a reasonable 16% premium to estimates of assets. However, it is the 4.9% dividend yield ? whose strong cash-backing should protect it from any setbacks to Amlin's bottom line ? that is the better reason to hold says the Times.Whichever language you choose, yesterday's full-year results from the translation software group SDL were pretty impressive. The company said that pre-tax profits jumped by 21% to a touch over £24m, helped by contracts with a host of new customers, including Continental Airlines and the UN. There seem to be few risks beyond the macroeconomic climate, which can affect any company. Buy says the Independent.Outsourcer Xchanging has been slow to fulfil the promise of its 2007 float and there is a danger that 2010 forecasts may prove too high. Growth in operating margins ? now 8.5%? has been delayed by the Cambridge deal, while the company has shifted its focus to winning smaller contracts than before. At 187p, or 11 times this year's earnings, buy on weakness says the Times.The economic downturn has not been kind to racecourse owner Arena. Attendances at its seven racecourses have remained reasonably robust, rising 2% last year, but the number of big-spending corporate hospitality customers has fallen sharply. The shares, up ¼p to 26¾p, are trading on a chunky 25 times 2010 earnings, but with the Reuben brothers, owners of Northern Racing, sitting on a 26 per cent stake and trading prospects improving, the shares are worth a flutter, suggests the Times.Given the economic troubles of the past year, WSP's preliminary results for 2009, published yesterday, are not as bad as they seem. The figures from the engineering consultancy do not make comfortable reading. Revenues dropped by 10 per cent to £723m, operating profits were down by 27 per cent at £41.3m and pre-tax profits dropped by a dizzying 51 per cent to £25.4m. But given the uncertainty about the UK's finances in the run-up to the general election, remain cautious says the Independent. Hold.One of the companies that benefits from the nation's love of footie is Goal Soccer Centres, which owns what it calls "next generation" five-a-side pitches around the country. It has 34 sites in the UK with plans for seven more this year and a further six in 2011. Management is confident for growth and on a price-to-earnings of 11 times revenues, it is worth a speculative dig. Buy says the Independent.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.