Wednesday tips round-up: Arm, Computacenter, RSA...

12th Jan 2011 06:59

The roster of ARM-based devices is, quite simply, astonishing. Name a fancy gizmo and chances are that it draws upon ARM's know-how in one way or another. iPads, iPhones, the Blackberry Bold - all feature ARM technology. The other day, Microsoft said it was going to launch a new version of Windows, one that is compatible with ARM-based devices. The announcement opens the door to fatter revenues as an ARM-friendly Windows operating system will mean that the Cambridge-based group's technology can be used in a whole host of new devices. The strength of the business means that the market is likely to keep the shares on firm footing as other companies battle with what remains an uncertain economic backdrop. Hold says the Independent.Computacenter benefits from an undemanding valuation. The balance sheet and cash position are strong, but the stock trades on just 11.9 times forward earnings, in line with the wider IT services sector. The market is being unduly harsh on a stock that deserves to trade as a premium to its peers. Pile in now before others wake up. Buy says the Independent.RSA Insurance currently offers the best dividend yield of any company in the FTSE 100. Its prospective yield for 2011 currently stands at a very attractive 7.1%. RSA is profitable and concerns about the sustainability of dividends in the sector appear overdone. The group's 2010 results have not been released, but are expected to show that the company has a combined operating ratio (COR) of 95% over that year. Trading on a December 2011 earnings multiple of 8.8 times, the shares remain a buy says the Telegraph.Dunelm has grown from a Leicester market stall selling curtains into a chain of mainly out-of-town stores specialising in workaday homewares, such as bedding and blinds. Yesterday, Dunelm put out a trading statement that showed a like-for-like sales decline of 1.2% in the past six months, suggesting a snow-affected 4.2% fall in the past quarter. On 15 times this year's earnings, the rating still seems too rich. Pass says the Times.Howden Joinery has the advantage of a portfolio of almost 200 stores that are not mature and it is still gaining the trust and the business of the local tradesmen. As a consequence of the strong second-half trading, Howden will comfortably beat this year's City profits forecasts, coming in at, or just below, the £100 million level. This puts the shares on ten times this year's earnings. A buy on any weakness says the Times.The sort of work that Mears and its rivals carry out traditionally would have been done by the building division of the local authority. Increasingly, it is being contracted out and Mears now has about 5% of a market that is probably worth about £9bn. The shares have suffered from the general malaise in the support services sector in the summer but have recovered. They sell on about 11 times this year's earnings, which sounds about right but buy on any further weakness, says the Times.Shares in Fiji-focused gold miner Vatukoula slid yesterday after the company issued a disappointing first-quarter operational update. Mine production in the first quarter of the year was lower than in the previous quarter, prompting the concern. The amount of ore mined by Vatukoula increased by 12% in the quarter, but the grade of the ore fell by 26% to 6.48 grams of gold per tonne. A speculative buy says the Telegraph.Topps Tiles looks to be in good heart with sales at stores open for at least a year up 2.2%. Interestingly, however, that fell to 1.8% including new store openings, suggesting that the new outlets haven't been doing that well. Usually, with retailers, it's the other way round. At 12.2 times 2011 forecast earnings, the shares no longer look as cheap as they did last April. Given the uncertainties, take profits 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.