Wednesday tips round-up: Big Yellow, Electrocomponents, Telecom Plus

23rd Nov 2011 06:11

The Times' Tempus column highlights Big Yellow's plans to halt further capital spending to improve debt. "If the capital spending tap is turned off, clearly there is potential for cash-flow...to rise considerably from the near-£30m each year at present," Martin Waller writes. Furthermore, while the company's performance is partly linked to the housing market, seeing as though almost three quarter of the storage group's stores are within the M25 and London's housing market seems robust, it should hold up well. The column says that while the yield stands at around 4%, "the stock's defensive qualities, and that potential dividend flow, have their attractions." Tempus recommends to buy for the long term.The Telegraph's Questor column has given Electrocomponents a hold rating, saying as concerns about the global recovery increase, there are also concerns about the growth of the company. The column notes the shares have risen 39% since July 2009 at 140.25p, compared with the FTSE 100 which is up 19%. They have been tipped as high as 285p before the recent market rout. While the group's balance sheet is strong, "until we get some clarity on the direction of the global economy, the rating remains hold," said Garry White."The business model practised by Telecom Plus, which trades as Utility Warehouse, is simple enough," says the Tempus column in the Times. "Every increase in the number of households prepared to take their energy, telephone and broadband needs from the company offers economies of scale and drops down to the bottom line." As such, the column says that with just 400,000 customers in the first half and 15m owner-occupier households in the UK, there is still farther to go. However the shares are trading on about 23 times prospective earnings and are a long-term growth stock. "Immediate gains could be limited," Martin Waller writes.BCPlease 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.