Tuesday tips round-up: Reckitt Benckiser, Electrocomponents, Persimmon

26th Jul 2011 06:28

Analysts had two concerns over the halfway figures from Reckitt Benckiser ? the tough market for personal care products in Europe and the slow adoption of its film version of the heroin substitute Suboxone. European sales were down 1% on a like-for-like basis in the first half and down 2% in the second quarter. The shares are selling on 14 times this year's earnings, which suggests little upside potential. Hold, says the Times.Electrocomponents is the world's largest distributor of electronic, electrical and industrial products. It operates in 32 countries, with distributors in a further 37. Electrocomponents's latest trading update was awaited with some nervousness after disappointment from one of its principal competitors. However, this proved unduly cautious and the statement was reassuring. Buy, says the Scotsman.Housebuilder Persimmon is showing some signs of life. Its trading statement earlier this month was fairly upbeat. The market is bad, but Persimmon is outperforming. We held at 437.5p in January. The shares haven't done much since but trade at 82% of their forecast net asset value. Hold for now, but if the shares show signs of weakness take the opportunity to wade in. Hold, says the Independent.Manroy is the UK's only producer of machineguns. recently bought another machinegun maker, Sabre Industries, which had gone into Chapter 11 bankruptcy. The shares are tightly held and little-researched. They pay a dividend and sell on a typical small company's rating, about six times profits. But Manroy is in a market that, regrettably, seems set for growth, says the Times.Having completed an arduous acquisition spree, Martin Gilbert clearly is settling back to ensure that the Aberdeen Asset Management ship is run as tightly as possible. Third-quarter figures show the best performance since September last year, with net inflows of £700m. The shares have come on about 80% over the past year and sell on about 13 times' this year's earnings, so any further upside could be limited, says the Times.Aberdeen still has a place in the Independent's portfolio though. It is worth noting that the company has cash on its balance sheet and is also generating strong earnings. So it should have the capacity to return more to shareholders soon. Remember that while Aberdeen has been acquisitive in the past, it has tended to buy unfashionable or distressed rivals on the cheap, so a massive acquisition-related bill is not a worry. We'd stick with it, says the paper.Staffline, which supplies clients with thousands of blue-collar workers every day, put out a reassuring trading update in early July, reiterating earnings hopes as investors awaited the payment of the full-year dividend for 2010, which was up 123% on last year. It trades on around 11 times forward earnings. Yes, the stock is valued at premium to peers. But that is well deserved, in our view, says the Independent, which recommends buying the stock.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.