Wednesday tips round-up: Anglo American, Informa, Devro...

23rd Feb 2011 06:43

Anglo American has a clear growth strategy, with a pipeline of 60 projects requiring $70bn of investment. It plans to double production of its commodities over the next decade. Anglo's Barro Alto nickel project in Brazil will begin production imminently and its Los Bronces copper expansion in Chile is expected to be up and running in the second half of the year. The Kolomela iron ore mine in South Africa is due to start production in the second quarter of 2012. Despite concerns over valuations, the long-term outlook for the sector is very rosy at the moment. There may be some volatility ahead but Questor is very happy with the buy rating because the company will be generating more than enough money to fund its growth projects, says the Telegraph.In terms of publishing, Informa is at the stable end of the market as the revenues are more reliant on subscriptions, which have remained resilient, rather than on advertising. Sales in its Academic Information business rose 4.7%, and the trend has continued with renewals for 2011, though it could suffer as education budgets tighten later in the year. The shares stand on 12.3 stand ontimes estimated full-year earnings for 2011, which looks pretty undemanding given the strength of its portfolio. Buy says the Independent. There is a clear trend that as people get wealthier they eat more meat. This trend is an opportunity for Devro, a leading manufacturer of sausage skins. The investment case is clear from these numbers - rising meat consumption in emerging markets and the conversion from traditional gut casing to collagen in sausage manufacture is continuing. For these reasons, the shares are a buy says the Telegraph.Age and vanity are almost as inescapable as death and taxes and Croda, which makes chemicals for cosmetics companies, is doing rather well out of our quest for a quick fix. The company provides much of "the science bit" that most consumers hear about through advertisements or gushing sales staff on the ground floor of big department stores. Trading at 13.8 times expected 2011 earnings, they're worth holding on to for a while yet says the Times.Bull and pig semen are not the most glamorous of commodities, yet Genus, which euphemistically calls itself an animal genetics company, did rather well out of it in the six months to 31 December. Revenues were up 10% to £153.2m and pre-tax profit rose 22% to £19.1m, with a particularly bullish picture in North and Latin America. Analysts are setting target prices of 20 times 2012 estimated earnings per share. Trading at around 19 times 2012 estimated eps yesterday, the share price is not exactly bargain basement at the moment. Hold for now, buy on future weakness says the Times.Pendragon, the UK's largest car-dealership chain, wheeled out a sparkling set of results yesterday. Boosted by a roaring trade in luxury cars, Pendragon more than doubled its pre-tax profits to £25.2m for the year to 31 December. The company, which has 236 franchise dealerships in the UK, trades on a forward earnings multiple of 6.6. Buy says the Independent.Morgan Sindall's executive chairman John Morgan saying that while the overall construction market was "looking 10% smaller", the company expected its own "market share to increase over the next few years". The problem is that, with a significant exposure to the public sector, negative newsflow out of the Treasury might well trigger profit-taking. Not a sell, but nor is it a buy just yet. Keep holding 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.