Tuesday tips round-up: Standard Chartered, Lonmin, Tesco

6th Oct 2009 06:44

Asian markets are likely to recover faster than Western economies - and this is where Standard Chartered is strong. There are concerns that the group may issue more shares in the next 18 months to fund its growth plans, but if this happens the group is likely to use its funds wisely. The bank is highly leveraged to global trade which is likely to recover from 2011. Buy says the Telegraph.Lonmin's shares have gained 73% since the start of the year. Like the mining sector as a whole, Lonmin has benefited from the anticipation of cyclical recovery. In particular, the outlook for the car industry, the biggest consumer of platinum through its production of emissions-reducing catalytic converters, is far brighter than in January. But the shares have also drawn momentum from Xstrata, which, since last year's abortive bid approach, has been sitting on a 25% stake. On the view that long-term demand for auto-catalysts has not gone away, the shares, at £15.33, are a speculative buy says the Times.Tesco shares have rallied since March, and now trade on a 2010 forward price-to-earnings ratio of 14.4 - only slightly above the retail sector average. Tesco also still has a strong long-term growth story to tell, particularly with its retailing services, non-food offerings and international markets. While the company has undoubtedly lost momentum in UK food, on a medium to longer-term horizon, Tesco should be a core part of any investor's shopping basket. Buy says the Independent. Eros International was set up to bring Bollywood to the world. With a rock-solid back catalogue, a good pipeline and some "issues" with Indian cinemas resolved, things look good. Corporate governance remains a concern, particularly in an industry where investors' interests have not always been well served, but at just 7.7 times 2010 full-year earnings, the shares look cheap, and are worth a punt. Buy says the Independent.Wolfson yesterday said its backlog (order book to you and me) had been "adversely affected by a faster than anticipated shift in product mix at a major customer following a previously announced design loss". In other words, Wolfson-free new iPhones (and other smartphones it doesn't supply) are taking over faster than expected. Especially in China. The new management team looks decent, but this doesn't look like a great bet. Sell says the Independent.Soap maker PZ Cussons has a strong balance sheet , falling capital expenditure after heavy investment in the UK and Nigeria and plenty of scope to buy further brands in Europe and Asia. At 251p, or 18 times earnings, the shares are a solid hold says the Times.Immunodiagnostic Systems Holdings reported a better than expected 56% rise in first-half revenues. Sales of its traditional Vitamin D tests ? used to detect osteoporosis, but also increasingly used as a predictor of some cancers ? have doubled. ISH benefits from having minimal competition and the potential to add more tests to its existing platform. However, at 467½p, or 18 times earnings, the shares look up with events. Pass 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.