Wednesday tips round-up: ARM, Reckitt Benckiser, Cineworld

28th Oct 2009 05:56

ARM Holdings cheered investors yesterday when it outstripped consensus estimates on its profits before exceptional charges at a time when the semi-conductor sector is suffering as a result of massively reduced demand for gadgets and consumer electronics.The company has also increased its margins by slimming down its operations, including the closure of a factory in Belgium. But, related charges of £6.5m was largely responsible for pre-tax profits tumbling from £15.8m to £7.7m. The shares have performed well, but the Telegraph's Questor believes there could be significantly more upside potential.With little prospect of substantial sales growth in Europe, its biggest market by far, Reckitt Benckiser has to convince that it can deliver on margins, too. The company is also promising several important launches next year, both new products and additions to existing product lines. Until there is more clarity on whether these are genuine, first-to-market innovations, hold, says the Times.The festive season is anticipated as eagerly by Cineworld as by any four-year-old waiting for Santa. After a mediocre third quarter, which suffered from comparisons with last year's musical smash Mamma Mia!, crowd-pleasers such as A Christmas Carol, featuring Jim Carrey as Scrooge, are expected to pack in punters again. The share price, up 45 per cent this year to 151p, or 9.8 times expected 2009 earnings, reflects much of the positive aspects of the story. A 6.3 per cent expected yield this year makes Cineworld shares worth keeping, according to the Times.With net debt of £2m and a pledge to generate cash this year, there are companies in worse shape and the rating of Vislink's shares - 5.9 times 2000 forecast earnings , falling to 4.4 times next year - is undemanding. Duncan Lewis, the recently appointed chief executive, has focussed Vislink on news, law enforcement, marine and energy. The Independent is willing to give him the benefit of the doubt with a buy, but it is a speculative one - so handle with care. Speculative Buy.Raising the dividend to 8¾p, from 8½p, indicates a management bullish about prospects. If full-year results bring a similar rise, Braemar shares, now at 8.5 times expected full-year earnings, start to look attractive, 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.