Tuesday tips round-up: Bovis Homes, Quindell

20th Aug 2013 08:02

The Daily Telegraph´s Questor team believes that shares of Bovis Homes are now a hold following their recent strong run and despite worries that the first increase in interest rates might come sooner than expected. All of the house builders are currently enjoying operational success and Bovis is no exception, the newspaper writes. Particularly worth noting is the group´s strengthened guidance for its return on capital, which is now expected to be at least 10 per cent for the full year, versus "approaching" 10 per cent beforehand. Furthermore, while now trading on a 2013 price earnings multiple of 18.5, this is expected to fall to 13.6 next year.Outsourcing specialist Quindell seems to have been priced for Armageddon, with its current year price-to-earnings multiple at 5.3 and expected to fall to just 3 in 2015. That seems to reflect market skepticism about its business model and recent strategy of acquisitions. However, yesterday´s interim numbers were better than expected on a number of fronts. The latest cash-flow numbers were particularly robust, revealing a £2.3m in-flow -without extraordinaries- versus the previous guidance for the period of an outflow in the region of £15m to £20m. This means that the promised dividend this year is looking even more likely and the group still plans to move to the main market from Aim this year or next. Revenues shot up by 78% to £163.3m. There could be more volatility ahead, so investors should regard this investment as speculative, but Questor keeps a 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.