Tuesday tips round-up: Severfield-Rowen, Serco, Lancashire Holdings

12th Jun 2012 06:55

The Telegraph's Questor column stays steer clear of structural steel firm Severfield-Rowen. It issued a profits warning yesterday, prompting a big sell-off. This has an attraction for investors because buying on weakness often leads to profits. But Questor believes the construction industry is too weak in the UK to justify a buy. The advice is 'avoid'.In The Times, Tempus likes outsourcing giant Serco's acquisition of Vertex. The £55.5m payout will enable Serco to offer more back room services like payroll when it bids for contracts. The idea is that customers now want a bigger spectrum of outsourced services instead of just frontline operations. On the other hand Serco shares have risen strongly this year so Tempus can only advise to "buy on weakness" (that phrase keeps popping up doesn't it).The relatively new (six years old) insurance company Lancashire Holdings gets the thumbs up from Tempus. It operates in the risky but profitable areas of reinsurance and "retrocession" and has proved adept at giving investors significant special dividends ($918m since 2007). 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.BS