Tuesday tips round-up: FirstGroup, Templeton Emerging, Hiscox

26th Jan 2010 06:51

Bus and train group FirstGroup has been called "the worst company in Britain" and the Telegraph completely understands this point of view but believes from an investment point of view, there are compelling reasons to buy the shares.In its third-quarter trading update, issued on 14 January, the group confirmed that it was on track to generate at least £100m in cash this financial year. This means that the group's dividend looks reasonably secure - and the payout is pretty chunky. The shares are trading on a March 2010 prospective yield of 5.6%, rising to 6% in 2011. A buy suggests the paper.The Telegraph is maintaining its buy stance on Templeton Emerging Markets Investment Trust, despite fears of a bubble driving up emerging markets. The trust's net asset value stood at 542.97p last week. Buy says the paper.Engineering project designer Aveva shares yield just 1%, but there has been talk of a special dividend to shareholders if it decides not to push ahead with M&A activity. The group's price sits at around 20 times March 2011 earnings, although that falls to about 17 times when cash is stripped out, which looks good next to US rivals. With the economy in better shape, Aveva yet to surpass its pre-Lehman's price, and prospects looking attractive, buy says the Independent.Trading at about 105% of the estimated value of this year's in force business, underwriter Hiscox shares are not expensive by historic standards, and this is a quality company which deserves a premium. That said, the independent is concerned about the direction of the market. Take profits suggests the paper.Hiscox is one of the most diversified among the traditional Lloyd's players. In 1996 it became the first specialist to write cover for high-value households and to offer insurance for small firms. Hiscox also has a flourishing sideline in fine art, jewellery, kidnap and ransom and piracy cover. Some brokers believe that the shares, which yield about 4.2 %, are capable of reaching 400p. Buy says the Times.The resilience of the toy maker Hornby is really quite remarkable. In an age when video games, television and smartphones seemingly dominate our ever-dwindling free time, the group that produces Airfix kits, train sets and Scalextric is quietly doing well. Trading on a 2010 price to earnings ratio of 15.6 times, the stock is not cheap, and despite the upbeat statement, there is no hint of a dividend. Hornby is improving but, with the shares no longer a bargain, hold for now says the Independent.Hornby can leverage its strong stable of brands this year, but while there is scope for growth, the foreign exchange issue will still weigh it down. Only hold adds the Times.Aegis, the media-buying and advertising group, is proving resilient in the face of several challenges, including not having a chief executive. Despite its strengths, the group trades at a discount to peers on 12 times earnings. It may lack a leader of its own, but it is still setting the pace for competitors. Buy 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.