Wednesday tips round-up: Compass, Enquest, Rio Tinto

28th Mar 2012 06:49

Tempus in The Times defends catering and contract cleaning group Compass from rather pernickety analyst notes about slowing growth. For the first half of the year organic growth (that is, stripping out acquisitions) was 5% versus the previous year's 5.5%. Tempus points out Compass is still a cash generating machine, making lots of bolt-on acquisitions in emerging markets. There's a lot of money to be made selling hot dogs in basketball stadiums and then cleaning up afterwards (a rough approximation of Compass's business model) but the shares trade on 15 times forward earnings, Tempus thinks they're not going much higher in the near future.Tempus likes North Sea-focused EnQuest, an oil and gas company which buys assets after the risky business of exploration has been completed. Benefiting from the recent Budget's adjustment to taxes on the oil and gas industry and with a pretty big cash war chest EnQuest has three major targets this year. Tempus also thinks it will look outside of the North Sea at some stage. With a clever strategy that avoids the extreme highs and lows of looking for black gold, Tempus thinks EnQuest will rise in the long-term.In the Telegraph, Questor gets to talk about his long term obsession with the diamond industry. Rio Tinto wants out, it only has about 6% of the market and no one is discovering new diamond mines. There simply isn't the scale in the market-place for an enormous player like Rio and it wants to put money into its huge iron ore interests in Australia. As ever, Questor makes the financial case quite simply, Rio trades on just 6.4 times 2013 earnings with a yield for that year of 3%. With miners having taken something of a hit recently, Questor says buy.BSPlease 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.