Wednesday tips round-up: SABMiller, AB Foods, Burberry

21st Apr 2010 06:39

Brewer SABMiller shares put on a decent 4.5% yesterday, but despite all the encouraging factors, the Independent suggests that punters looking to buy now have missed the boat.The forecast 2010 dividend yield, at 2.4%, is no better than adequate, and not big enough to counter what could be an inert share price. SABMiller is a decent company, and undoubtedly solid, but there is more fizz around elsewhere. Hold for now the newspaper concludes.Yesterday's advance ? up 86p to a record £19.96 ? could mean SABMiller shares mark time for a while, but this is a well-run company with strong brands that is well placed for recovery. Hold say the Times.At £10.15, or 15 times current-year earnings, AB Food's prospects may appear fully priced in. But this is a business with annual sales of £3bn and the case from here is that margin improvements in grocery have much farther to run ? perhaps into double digits. There is also scope for gains at Primark, where margins trail those of Inditex, the owner of Zara, and H&M, the Swedish fashion chain. Hold on says the Times.Fashion marque Burberry trades on a multiple of 21.2 times earnings estimates for 2010. That does fall to 18.4 on the numbers for 2011, but, given recent strength, investors should exercise some caution says the Independent. Again, this is not about the company - there are no grounds to justify a sell rating. But given recent gains, hold says the newspaper.Cove Energy's decision to cease drilling at its second "Collier 1" well because of safety concerns gives even more reason to buy. Optimism is still running high. While Collier is suspended, the remaining three wells will go ahead. And if there is time at the end of the programme, Collier will be revisited. For investors interested in explorers, Cove has an unusual combination of cash, assets and promise. Buy Cove while it's cheap the Independent says.With estimated gross resources of four trillion cubic feet, Mozambique gas discovery Windjammer should underpin Cove's share price at 49p, where its equity is valued at £166m. That leaves any upside from the remainder of its exploration campaign in Mozambique, together with its 20% stake in the Mnazi Bay gas project in Tanzania, in for nothing. A risky buy adds the Times.Although there was a slowdown in the fourth quarter, Northern Food's focus on higher margins, investing for growth and improving cash generation means the dividend looks solid. On a number of occasions Stefan Barden, chief executive, has said the company is committed to maintaining its dividend and that he has a desire to improve the payout as profits improve. On a March 2011 earnings multiple of 8.9 and yielding 7.5%, the shares remain a buy for the yield 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.