Tuesday tips round-up: Xaar, AstraZeneca, Gemfields

11th Jun 2013 07:17

Since having floated itself back in 1996 at about a quid, inkjet printing technology outfit Xaar has metamorphosed into the market leader for the digital technology used to produce ceramic tiles ? a huge market, especially in China. About 15 per cent of tiles are produced digitally at present, but this is set to grow to 80 per cent by 2015. Little surprise then, perhaps, that the company's stock soared yesterday following a fourth successive profits upgrade this year which has sent it knocking on the door of the FTSE 250. Xaar is not a huge payer of dividends. On the expectation of a 4.8p total this year, the shares yield less than 1 per cent. The main reason for holding them is the expectation of further growth, both in ceramics and into further markets, writes The Times's Tempus. AstraZeneca yesterday took another step on the path to rebuilding its drug portfolio, announcing the purchase of Pearl Therapeutics, a US-based outfit focused on respiratory ailments. That fits nicely with the Chief Executive - Pascal Soriot's - stated strategy of focusing on five key growth platforms. Respiratory is one of those and last year it was the most robust segment of the company. Nevertheless, half the price paid depends on the success of Pearl's products, one of which is now in late stage clinical trials. Investor support is justified, but the company will have to do more than just execute expensive bolt-on acquisitions, says the Financial Time's Lex column. Gemfields's management is nothing if not ambitious. They are trying to establish a platform to produce and promote coloured stones worldwide along the lines of what DeBeers did for diamonds. Unfortunately, they has run into a legal tussle with the Zambian government over the marketing of its gems. The plan is undoubtedly ambitious, which means it carries a degree of risk. However, there will be significant upside should Gemfields be successful in developing global interest in coloured gemstones. The shares remain a speculative buy, says The Daily Telegraph's Questor team. 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.