Wednesday tips round-up: Robert Wiseman, Avis Europe, Derwent London

18th May 2011 06:20

The imponderables for Robert Wiseman are whether the price of raw materials falls and how much more of the existing rises can be passed on to customers, after some degree of success in this in February. Assuming that nothing gets much worse, the dividend looks safe, which gives a yield of about 5.6 per cent, which is attractive enough. The shares, off 11p at 323½p on the profits update, sell on nine times' this year's earnings, but further progress on that front looks limited. Hold, says the Times.Car rental group Avis Europe was always going to be affected by last year's Icelandic ash cloud. In the event, the effect was twofold and probably broadly neutral. Obviously, fewer flyers meant fewer cars being picked up at the airport. But there were an awful lot of desperate one-way rentals covering long distances from country to country. The shares, on about 11 times' this year's earnings, are an obvious play on further growth but may be hard to track down, says the Times.Derwent London issued an encouraging update yesterday, with the property group's chief executive, John Burns, confirming that the central London office market had continued to "perform strongly" over the first quarter. Panmure Gordon puts the stock on a 13 per cent premium to net asset values, which makes the Independent cautious. There is no reason to sell. But it would wait for a better time to buy. Hold, it recommends.Pub group Enterprise Inns has repaid £800m of debt. Bank borrowings of £545m are comfortably below banking facilities and the rest of the £3.1bn of debt is in the form of long-term instruments raising no concerns for now. Enterprise is well along the way of sorting out its bottom-end pubs, with about 700 still to be sold or upgraded, or 10% of the estate. The shares trade on less than four times' this year's earnings. Without any certainty over the dividend, there seems no obvious reason for any sharp recovery, says the Times.The Independent says some investors may be attracted to the potential dividend and will be pleased to note that Enterprise trades on a cheap forward earnings ratio of 3.6. However, given its high debt levels and sprawling estate, it doesn't see much fizz in its shares for the foreseeable future. Sell, the newspaper advises.Diploma, which supplies specialist technical equipment and services to a number of industries including the construction sector, revealed a rise in its pre-tax profits of 50%, while revenues climbed by nearly a third. We've been recommending Diploma for a while now, says the Independent, and our faith has certainly been rewarded with its share price more than doubling in the past 14 months. But the stock still appears to have upside, especially considering the fact that it could potentially be in line for promotion to the FTSE 250. Buy, it says.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.