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Friday tips round-up: Old Mutual, Thomas Cook, Trinity Mirror

Fri, 14th May 2010 07:00
Old Mutual's shares have bounced strongly since 2009's lows, up 87% on the year. They now also come with a dividend ? the company resumed payouts in March after skipping two in a row ? which provides a 4.1% yield. However, at 121p, or ten times 2010 earnings, the greater appeal lies in progress on disposals and the return of some of the proceeds to investors. Hold on says the Times.Long-term incentive schemes can be powerful things. Take Euromoney Institutional Investor, the mid-cap financial publisher and events organiser, whose "capital appreciation plan" will pay out £30m to executives if pre-tax profits pass £100m in 2013 ? against the £63m it recorded in its last financial year. Euromoney told the City yesterday that it expected revenues to rise in the three months to June 30, the first quarterly advance in nearly two years, and three months sooner than planned. At 568p, the shares trade at 12 times current-year earnings, not stretched given the scope for further upgrades. Buy on weakness says the Times.Holiday group Thomas Cook's first-half operating loss of £130m was not as bad as the City had feared. Its 5% fall in revenue should be put in context: it was about taking out excess capacity so margins should be maintained. On an undemanding eight times full-year earnings, keep buying says the Independent.Conygar Investment Company is the vehicle of Robert Ware, best known for running Development Securities in the 1980s and breaking up MEPC in the 1990s. High-yielding secondary properties are not to everyone's taste, but this is a case of backing a team with a strong track record. At 116p, or a 19% discount to the latest net asset value, tuck away says the Times.Newspaper group Trinity Mirror's update was hardly positive, but it offered grounds for hope and the 12% share price slump was overdone. Like its peers, Trinity has had a tough few years and the shares reflect that. What they are missing is the potential for improvement as the year progresses. With that in mind, buy says the Independent.Ground engineering specialist Keller's US market is particularly tricky. Economic weakness, intense competition and bad weather have left it facing a break-even situation at best in the first half and will drag it down over the full year. Keller's European markets also remain sluggish. Time to take profits and look elsewhere says the Independent. Sell.Dignity owns 550 funeral homes and 30 crematoria. There had been fears that the recession would reduce discretionary spend on items such as limousines and flowers, but this has remained relatively robust. The yield is just 2.1pc, but it is well covered by earnings so there is plenty of scope for an increase. The shares are trading on a December 2010 earnings multiple of 14.5 times, falling to 13.3 next year. Buy says the Telegraph.Caterer Compass should continue to grow and benefit from better margins, its move into emerging markets and the fact it is geared to an economic recovery. Compass also has a large business in the US, where the recovery is happening faster than in Europe. The defensive characteristics of the shares have been proven. Buy 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.

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