Tuesday tips round-up: Whitbread, Great Portland, Mouchel

15th Dec 2009 06:56

Whitbread shares are not cheap, trading at a 2010 price-to-earnings ratio of 15.6, but some of its rivals' are more expensive.And Whitbread's decision to invest in its business during the downturn - while keeping a tight lid on costs - bodes well for the year ahead, as the UK slowly emerges out of recession. As long as the spectre of a double-dip downturn does not materialise, Whitbread's other businesses could start to contribute more to coffee chain Costa's international sales froth. Buy says the Independent.Analysts interpreted Whitbread's comments as a 5% upgrade of profit forecasts to £231m. That puts the shares, up 50p to £13.80, on a forward multiple of 14.8 times. That is not cheap for a consumer-facing stock still coping with tough market conditions but the signs are that it has yet to run out of steam. Hold says the Times.London?based property group Great Portland is trading on a 4% premium to brokers' March 2010 NAV estimate. This falls to a 10% discount for the following year. Although the stock does not appear expensive, thanks to the solid strategy and improving economy, it hardly offers stunning value. Hold until there are clearer signs of recovery, but buy if Great Portland's shares begin to ease, the Independent reports.Shares in the provider of utilities support services Spice fell 18% as it cautioned that it would miss full-year profit forecasts ? the first such warning in the five years since it floated ? and wrote down the value of its troubled gas division by a hefty £42.9m. At 58½p, or eight times earnings, Spice's £116 million of net debt and the wariness that follows all highly acquisitive companies is likely to keep buyers on the sidelines for now. Pass say the Times.Contractor Mouchel said that VT has made two approaches, but the board has rejected them as "wholly inadequate and at a level which substantially undervalues the company". No financial details were released, but market speculation put the level of the bid at about 250p a share. The shares certainly seem cheap. Even after the recent surge, the shares are only trading on a December 2009 earnings multiple of 9.2 falling to 8.7 next year. The yield is 2.6%. Hold says the Telegraph.RWS searches patents internationally and translates them and other technical documents. What would really knock RWS would be a Europe-wide patent. This was rejected in 2005, but it is still under discussion. Still, the company has time to diversify and is seeking to do so, and a rating of about 10 times next year's earnings is undemanding (the yield is 4%), so hold says the Independent.With the shares trading at ten times earnings once the cash is ignored and chief executive Andrew Brodie's 45% stake ensuring that dividends (up 12% yesterday) should continue to rise, 315p looks a good point to buy RWS adds the Times. Yesterday's update from Bunzl was reassuring. The group said revenue had risen by 11% so far this year, but most of this was down to currency moves. Stripping out the effects of foreign exchange, revenues slipped 1%. Given the events of the past year, this is a respectable performance. As a defensive play with gearing to an upturn, the stance on the shares remains buy says the Telegraph.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.