Tuesday tips round-up: Serco, Lonmin, Eros

10th May 2011 06:30

That Serco's shares managed to remain strong throughout the session after the outsourcer issued an update yesterday is creditable. The update was reassuring, with the group saying that it remained on track to deliver on expectations for 2011. We do think that Serco is fairly valued at current levels, says the Independent, which recommends holding the stock.Platinum miner Lonmin is down around 20% since the beginning of the year. Although many are fretting about a correction in commodity prices and its impact on mining equities, Lonmin has already been through quite a correction. If the wider sector does in fact move south, it should stand firm, in the Independent's view. Buy, the paper recommends.Eros is an entertainment company involved in the distribution and production of Indian films. The company's recent pre-close update was positive, it's performance for the coming year "ahead of expectations" so far, driven in particular by accelerated investment resulting in higher theatrical revenues and a string of pre-sales for TV. For those looking for an involvement in the media and entertainment dimension of the Indian economic phenomenon, Eros looks interesting. Buy, says the Scotsman.Although they are much too sensitive to say it, the people at Inmarsat do rather well when world events take a turn for the worse. The company provides mobile satellite communications, so when disaster strikes and aid agencies arrive, they need the links it provides to the outside world. The shares are now selling on about 12 times' this year's earnings. Falls in the spring look overdone and at that level the shares offer good value, says the Times.Hiscox, the Lloyd's of London insurer which issued an update for the first three months of the year last night, has confirmed that its hit from the Japan tsunami could be up to $150m, while its loss estimates for the Queensland and New Zealand earthquakes remain at £15m and £60m. There were also positive figures from the UK's retail business with premium income climbing 8% to £86.2m. However, with Japan losses still subject to a large degree of uncertainty at the present time, we would be wary of wading in right now, says the Independent, which has a hold recommendation.The Times says Hiscox's shares are among the most expensive of the quoted Lloyd's insurers, trading at 1.3 times book value with a dividend yield of 4%. But if Hiscox is right and rates are rebounding, the shares have potential, the paper says.Centrica is, according to research from JPMorgan Cazenove, the fourth-worst-performing European utility in the year to date. The shares sell on a little more than 11 times' this year's earnings and have the support of a 5.2 per cent yield. This suggests that the price has fallen too far, even if sentiment may continue to weigh on the shares until future trends are a little clearer, 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.---RG