Wednesday tips round-up: Chemring, Domino Printing, Aggreko

24th Jun 2009 06:46

Military flares, decoys and munitions group Chemring draws three quarters of its sales from outside the UK, so the boost to yesterday's numbers from weak sterling will not be sustained. However, at a time when fears of budget cuts hang over defence stocks, Chemring should continue to produce strong double-digit earnings growth while £100m of annual cash generation and low net debt give it ample firepower for bolt-on acquisitions. At £20.96, up 97p, or ten times earnings, hold on says the Times.Domino Printing seems to be holding market share against Danaher and Dover, two big American rivals. That stabilisation gave the company confidence to raise its interim dividend by 10%, better than expected. However, an intention to slow the pace of acquisitions, a significant contributor to Domino's historic growth, and an above-average forward earnings multiple (nearly 13 times) indicate that, at 244¼p, up 20p, the shares are up with events. Pass says the Times.Aggreko is well positioned to make the most of this a shortage of power on a global basis. The shares are trading on a December 2010 earnings multiple of 9.6 times and yielding 2.2%. The Telegraph still believes in the long-term growth story, despite some expected weakness in the second half of the year. Shares in Aggreko remain a buy, but income-seekers may wish to look elsewhere because there are higher yields in other sectors. Standard Chartered trades on a current-year earnings multiple of 13.2 times, falling to 12.6 in 2010. This is not too high considering the growth prospects in its markets. The yield is currently 3.2%. There is likely to be continuing volatility in the shares, but they remain the long-term UK-listed banking play. Buy says the Telegraph.At 101p, chemical group Yule Catto shares have more than doubled from their March low. However, at six times forward earnings, they are still inexpensive, especially giving Yule's gearing to recovery. Buy on weakness says the Times.The Independent recommends buy Yule Catto before everyone else realises the red lines on the balance sheet are gradually receding.Oxford Metrics, a company which produces "image understanding products" such as motion capture technology and video analysis for military drones. It is one of one of those stocks whose price is driven by newsflow and as such the Independent would wait for a more upbeat statement before buying. Hold for now.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.