Tuesday tips round-up: Senior, Johnson Matthey, Cove

29th Nov 2011 07:31

The timing is auspicious for Senior's purchase of Airbus-parts supplier Weston, as the market for large commercial aircraft is just starting to take off, notes Tempus in The Times. The deal, at £54m, or the equivalent of one year's sales or eight times' annual earnings, might look an expensive one, but otherwise it ticks all the right boxes, and reduces Senior's dependence on Boeing as a major customer. Senior shares have had a good run over the past couple of years and had added another 2¾p to 165p by last night. They sell on about 11 times' earnings, which does not look overly cheap, but they remain among the better-placed in their sector.Shares in platinum refiner Johnson Matthey are a "hold", reckons Questor in the Daily Telegraph. The shares are down 12% so far this year since they were recommended at £20.38 at the start of January, despite an impressive financial performance as investors continue to worry about the global outlook. The shares are trading on March 2012 earnings multiple of 13.1 times, falling to 12.3 next year. Given the continuing market uncertainty, the shares are a hold for now until we get some clarity on the euro.Rio Tinto is among the select group of companies that can reasonably be considered mining bellwethers. It is, therefore, useful to pay attention to its comments on the goings-on in the resources world, claims the Investment Column in The Independent, adding that the latest noises have been less than bullish. Rio's chief executive, Tom Albanese, warned that "continuing stresses in the Eurozone and a weaker outlook for the US economy are inevitably affecting customer sentiment, which has become more negative in recent months". Despite this, the Indy sticks with its "buy" recommendation as the long term trend towards greater consumption of commodities remains intact.If Cove Energy wants to sell its 8.5% holding in the giant gas field off the coast of Mozambique, there will be no shortage of willing buyers. according to Tempus, writing in The Times. The East African coast is the new hot spot for oil and gas and many of the majors are queueing up for a piece of the action. Its other assets, up the coast off Kenya and Tanzania, are much less well developed. Cove reckons to have funding in place to stretch until the first quarter of 2013 and so is in no hurry to make a move. The favourable update gives some encouragement that there will be further good news from that part of the world. Oil exploration is always a leap in the dark, investors will be aware, but they should stick with Cove for now.Elsewhere in the oil exploration world, the Telegraph's Questor looks at the excitement building up over Ophir Energy, which has a drilling programme of potentially high-value wells over the next year. This programme is fully funded after the company's flotation in July this year. The most important near-term thing to consider is the prospects for its liquefied natural gas (LNG) assets in Tanzania, where it is working in partnership with BG Group. News from rival Anadarko yesterday showed just how prospective the area is. Ophir's Tanzania acreage borders Anadarko's block to the north. This company is definitely one to keep on the radar - and news flow should be very strong over the next 12 months, claims Questor.--jhPlease 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.