Wednesday tips round-up: Hamworthy, BATS, Phoenix IT...

8th Jun 2011 06:48

The speed of the revival in the Hamworthy's fortunes is probably best shown by the growth in the order book, up from £142m a year before to £258m at the end of March. The shares, 13% ahead at 634½p last night after those upgrades, are up by almost 50% since the start of the year and sell on around 22 times' this year's earnings, which suggests the good news could be in the price. Long-term holders might consider taking profits, writes the Times.British American Tobacco (BAT) shares are now more than £3 higher than in the first week of January and they recently hit an all-time high. The dividend stream is the main attraction of the shares. In terms of prospective yield, the shares have the 17th-highest dividend yield in the FTSE 100. BAT's prospective yield this year is 4.53pc, rising to 5pc next year. The Telegraph recommends to buy for the income.Phoenix IT has been investing heavily in the cloud computing (which involves storing your data and applications remotely, rather thanhaving everything kept on your own system), aiming to sell the concept to businesses and public sector bodies, and other IT companies and telecoms providers. The cloud side of Phoenix IT grew at more than 40% last year and the company has just merged two of its divisions that serve those end-users, with the idea is to cross-sell from one to the other. The shares, up 23p at 232½p, are on a relatively low multiple of eight times this year's earnings. I have said it before, but that rating will one day rise. Buy for then, recommends the Times.Marketing group Aegis confirmed on Monday that it was in talks with French rival Ipsos to sell its Synovate market research business. The result was a spike in the company's shares, which rumbled up to a four-year high. WPP's shares, on the other hand, went the other way as the market digested rumours of whether the advertising giant would wade into the fray with a counter bid. In terms of valuation, the stock trades on a forward earnings multiples of 11.6 times. And although that isn't pricey, speculation that it may bid for Synovate would likely spark weakness. So, despite the growing revenues, we think there could be potential for a short-term pullback. The Independent recommends to hold the shares.The demise of Dawson Holdings is a measure of how little the market values small caps. The company distributes academic books, newspapers to aircraft and adverts. It has a full listing and a market capitalisation barely into double figures. Smiths News, a much larger rival, is taking it out for about seven times' annual trading profits. The bid talks between the two companies began last year; the deal has taken this long because of various legacy liabilities from the administration and the position of the pension fund. These resolved, Smiths can walk away with a useful, opportunistic add-on. Dawson shareholders may regard themselves as well out of it, but it seems a pity, according to the Times.Charles Stanley's turned in a healthy 30% increase in profits at £13.4m on record revenues of £125.6m. Funds under management rose 13.3%and private client income was up 10.3%. The total dividend will rise 13.8% - ahead of expectations. On a price to forecast earnings ratio of less than 10 per cent the stock looks attractive. For those prepared to ride out choppy economic and market events, the stock is worth buying, suggests the Independent.---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.