Tuesday tips round-up: Smith & Nephew, Persimmon, Ocado...

11th Jan 2011 06:39

Rather than Johnson & Johnson, the most attractive option for Smith & Nephew investors could be a straight take-out by the likes of the American pharmaceutical giant Merck at whatever price the board could wrest from a bidder. Speculative investors such as hedge funds, who would push for a deal, are barely represented on the share register, most investors being long-term holders. Although some are already taking profits, with some reason given how far the shares have come, the smart money is on sticking with S&N says the Times.Persimmon admitted that recent activity in the housing market had been hit by the severe weather conditions, it said that pricing has "remained stable" and that the margins on forward sales of about £565m have been maintained. While many analysts believe that Persimmon's shares offer good value - they trade at just 0.86 times forecast 2010 net asset value - be cautious until sentiment on the wider market picks up. Hold for now says the Independent.Persimmon is well placed to benefit from any pick-up in the market, but the sector will probably need some more positive news on consumer demand before share prices start to shift upwards, adds the Times.Some analysts now believe, on the back of various abstruse calculations, that distributor Ocado could flip into profit by the end of this year, ahead of forecasts when it floated in the summer. Ocado is a well-run business with a clear growth strategy, but at this price a purchase does not make much sense except as a very long-term gamble, says the Times.The market for diagnostics is a growing one, not just here, but in emerging markets - an area where Axis-Shield is already active. Moreover, Axis boasts a strong balance sheet. The market is too bearish about this stock. Buy says the Independent.Recruiter Michael Page's growth growth appears to have peaked, excepting the Europe, Middle East and Africa region, in the third quarter. What's more, at the current level the shares trade on a very high multiple of 22 times 2011 forecast earnings, although that falls to a more reasonable 14 times 2012. Time to take profits, but look to buy again on any sign of weakness says the Independent.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.