Tuesday tips round-up: St Modwen, Ocado, Kofax...

8th Feb 2011 06:46

Property group St Modwen's net asset value is forecast to be up to 234.5p by next year and the shares are beginning to suggest a re-valuation may be in order if it can keep things looking healthy in what the company admits are "challenging markets". The prospective yield, at 1.6%, is nothing to write home about but it might be worth taking a chance on the shares. Buy says the Independent.Online grocer Ocado will probably make its maiden annual profit this year, but the stratospheric forward multiple its shares trade on - 168 times forecast earnings - and their volatility since it floated make the Independent nervous. Therefore, while there will be plenty of growth for all the big players, notably Tesco, Sainsbury's and Asda, in online grocery for several years to come, avoid Ocado until sanity is restored to its valuation.Kofax says it is the "leading provider of document driven business process automation solutions". But behind the appalling word salad lies a company that has impressed the market with solid growth, and there could be more to come in 2011. What Kofax actually does is offer companies software and services to manage data capture. It takes documents in any format and downloads them into a single system. On an estimated value of eight times full-year earnings before interest, taxation, depreciation and amortisation, buy says the Independent.Kofax has been talked about as a possible takeover candidate. The share price, up from as little as 168p a year ago to 440p, reflects this, and the work that management has done in getting to grips with the business. The shares now sell on about 23 times' this year's earnings, a bit rich for a predator, one might think. Well up with events adds the Times.Housebuilder Bellway's sales for the six months to the end of January were little changed on a year before and, while the average price of its homes was up almost 8%to £168,000, this is mainly due to a switch away from flats towards traditional houses. The shares have shot ahead from little more than £5 before Christmas and now stand at 655p, on a 25% discount to net assets, about par for the sector. No need to chase 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.