Wednesday tips round-up: Marks & Spencer, Burberry, Dairy Crest

20th May 2009 06:35

The time to buy shares in M&S is when sales are rising, it has a long-term chief executive in place and there is a solid strategic plan for the future. Now is clearly not the time on any of those counts. Avoid says the Telegraph.Burberry, the luxury goods group, hailed its full-year numbers as a success yesterday after reporting that revenues, at £1.2bn, had smashed through the £1bn barrier for the first time. The group continues to do well and the stock is one of the better performers in its sector and will add stability, if not growth, to a portfolio. Hold says the Independent.The problem for Burberry is that the trading outlook remains opaque, the room for further cost cutting is limited and forecast profits are flat. This suggests that at 395¾p, or around 14 times earnings, the shares are no more than a hold counters the Times.Dairy Crest's chief executive, Mike Allen, argues that its brands are strong and that the dividend cut is the last part of an effort to reposition the company. The group's debt is now at manageable levels. It is tough, however, to back an expensive stock when the dividend is cut, regardless of anything else. For that reason we would give Dairy Crest a wide berth. Sell says the Telegraph.Dairy Crest has worked hard to reduce debt, now £416m, and trim overheads. However, having nearly doubled from their December low, the shares, at eight times earnings, are up with events. Pass says the Times.Armed with £175m rights issue proceeds and the additional borrowing capacity that a stronger balance sheet unlocks, property group Great Portland has firepower of £540m - from which it should be able to generate substantial value for shareholders. At 315p, up more than 7%, the discount to net asset value is only 4%. All the same, buy says the Times.Condom and footwear group SSL shares are trading on a March 2010 earnings multiple of 15.7 times, falling to 13.5 in 2011. This rating is not too rich for a company that plans to increase earnings per share by as much as half in the next three years. There are not many companies around with a high degree of confidence in their future. Buy says the Telegraph.Broker Evolution is clearly an ambitious group and is positioning itself to do well from an upturn in economic circumstances. The bet is on when this will come but, even if it is not soon, investors can still take solace from the group's sector-beating performance. Buy says the Independent.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.