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Wednesday tips round-up: Britvic, Mothercare, BG

Wed, 15th Jul 2009 06:37

The sun shines, ergo, the drinks companies do rather nicely. When the group in question, Britvic, owns the Robinson squash brand and Wimbledon turns out to be more entertaining than usual, you would expect it to release good news to the market. Britvic is likely to have a good time of it over the next 12 months, and the Independent would take a punt on the market catching up at a later date. Buy.Britvic shares are now trading on a September 2009 earnings multiple of 11.5 times, falling to 10.4 times next year. With analysts expected to upgrade their forecasts, the current multiple will fall as consensus forecasts rise. The shares are also yielding 4.4%, which is well worth having. Shares in Britvic remain a buy says the Telegraph.Maternity and babywear group Mothercare is one of the exceptions to the gloom in the retail sector. The company's first-quarter trading update should be strong. In total, the company has seen 15 consecutive quarters of like-for-like growth, a remarkable performance in any business, especially given the current market conditions. A current year earnings multiple of 16 is deserved and falls to 14.7 in 2011 then 13.9 in 2012 on growth estimates. Buy says the Telegraph.If you look at a graph of oil explorer Melrose Resources' performance, it ebbs and flows pretty much in line with the price of the black stuff. An equity to raise £11.2m will speed up the drilling of its Kaliakra appraisal well in Bulgaria and its Egyptian field development. It is its Bulgarian gas projects, however, that are really exciting. The shares might do little beyond the oil price, but the yield is among the best in the sector. Buy says the Independent.Bookies are proving relatively resilient in the recession, which is good news for the betting industry technology company Alphameric. Joe Lewis, the super-rich investor who also has a stake in Ladbrokes, has been increasing his stake - a fact that is worth watching closely. The valuation, at 9.8 times this year's forecast earnings, is undemanding, and the yield, at 5.5%, is good. Buy says the Independent.Forget the nags. Shares in Alphameric, which beams live racing footage into bookies' shops, have proved the better bet this year ? more than doubling since January. The problem is that the next batch of UK media rights do not come up for grabs until late 2011, meaning that Alphameric has limited short-term scope to extend its reach to other racecourses. Meanwhile, bookies are deferring spending on new IT systems ? Alphameric's other business ? amid the consumer downturn. The shares have run far enough for now. Pass says the Times. Yesterday, BG took delivery of its first cargo of liquefied natural gas (LNG) to its newly commissioned Dragon terminal in Milford Haven. Meanwhile, BG last month secured a foothold in US shale gas through a $1.3bn joint venture. Further clarity on BG's progress, together with an update on its Tupi deepwater discovery in Brazil, should come with first-half results on July 29. At £10.03, or 15 times earnings, hold on says the Times.Marine services group James Fisher has not been immune from recession: its coastal tankers (which ship oil from refineries to local depots) have suffered from lower volumes. However, any weakness should be more than offset by growth elsewhere while, after an 18-month hiatus, Fisher is well placed to make bolt-on acquisitions. At 401p, or nine times earnings, buy on weakness says the Times. 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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