Wednesday tips round-up: Next, Brammer, Rolls-Royce

22nd Jul 2009 06:46

Increasing unemployment could be a real problem for the high street and Next. Chief executive Simon Wolfson disagrees, arguing that the rate of joblessness is not increasing and neither unemployment, nor concerns about swine flu, has had any affect on the group's sales season. Even so, hold for now says the Independent.The price of oil has roared back in the last few months, and so has the share price of Dragon Oil, the development and production group that has its operations in the Caspian Sea off Turkmenistan. With the price of the black stuff continuing to make up some of the ground it lost towards the end of last year, the Independent favours groups like Dragon. UAE-owned Emirates National Oil Company (ENOC), which already holds 52% of Dragon, has made an offer for the rest of the group. Buy says the paper.Spread better IG is subject to substantial swings in short-term earnings. But the longer-term draw ? of a market leader with a strong brand, technology and overseas growth potential ? is undimmed. At 276¼p, or 11 times earnings, and yielding 5%, hold on says the Times.IG's 25% hike in its dividend is an unusually confident move, given underlying market conditions, and is a strong message for management to give to the market. The 5.5pc yield is well worth having. Shares in IG Index remain a buy adds the Telegraph. At 43p, or seven times earnings for the 12 months to April 30, 2011 ? the next financial year in which a profit is forecast ? estate agent DTZ's shares are not obviously cheap. It is also far too soon to detect any increase in valuation and consulting activity that might foretell a pick-up in volumes. But management is heavily incentivised to succeed, and its backer SGP has not wavered to date. A buy for the brave suggests the Times.If Britain still has an industrial bellwether, Brammer is probably as close as it gets. This small-cap company distributes components used to maintain production lines ? bearings, belts, clutches and couplings ? and, as such, remains a closely tracked barometer of factory output. At 113½p, or six times earnings, and yielding 6.8%, the gloom is largely priced in. A speculative buy says the Times.Distributor Brammer's performance has improved as the economy has woken up from its long hibernation of the last few months, but investors are still very nervous about industrial groups. Hold on for better news on the economy. Cautious hold says the Independent.Rolls-Royce is the UK's largest exporter and should continue to benefit from a re-rating of the pound to a lower level compared with other currencies. The shares are trading on a December 2009 earnings multiple of 11.4 and yielding 3.8%, which does not appear to be overstretched.The stance on the shares remains buy at these levels says the Telegraph. 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.