Wednesday tips round-up: Experian, Hiscox

13th May 2015 14:14

Experian believes consumer spending in the UK and US began to recover towards the end of 2012. However, the company's financial year to the end of March was a sluggish one. On an organic basis sales grew by just 3% after a flat turnout over the previous three quarters. The firm, which provides credit scoring services, registered a 2% dip in North American sales. However, sluggish US growth was in part the result of customers being moved onto its own platform. Regulatory pressures were another factor. The Brazilian market was also a drag.Nevertheless, the company is highly cash generative. Experian should also benefit from the improvement in the economies of the UK and US. Indeed, incremental rises in revenue have a disproportionate impact on the firm's bottom line. At 20 times earnings the shares are not cheap "but they are worth it for the long-term," writes The Times's Tempus.Things turned up for Hiscox in the first quarter. Total written premiums increased by 12% to £561.7m as its retail operations in the UK, Europe and US picked up. The insurer concentrates on specialist areas such as professional indemnity, especially in the US. Investment performance also improved on last year after the introduction of quantitative easing in Europe. Shares fell on profit-taking. At 1.8 times net asset value the stock's valuation is high for the sector but the shares are worth holding for the long-term. However, now is not a moment to buy in, although any weakness would provide an opportunity. Avoid for now, Tempus said.