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Wednesday tips round-up: Oxford Instruments, UK Coal, ENRC

Wed, 15th Jun 2011 06:31

Analysts have been known to complain mildly about the slow progress of Oxford Instruments in finding promised acquisitions. The maker of high-tech analytical devices announced two yesterday, and the slow pace seems understandable. Such acquisitions are tricky, being more about providing a sympathetic working environment than hard cash, but chief executive Jonathan Flint says they are available. The shares are on a high 17 times' this year's earnings, but that does not seem unreasonable. Certainly, buy on any weakness, says the Times.UK Coal is best seen as a coalminer, supplying about% of the country's output, or enough to provide 7% of its electricity needs, with a huge legacy property portfolio and equally huge debt attached. Only last week the company signed a deal with Taylor Wimpey that could lead to between 3,000 and 4,000 new homes being built on restored colliery land. These are still early days, and profits are several years away, says the Times.Miner ENRC's annual general meeting saw no fewer than four non-executive directors leave the board. Add in the fact that this month will see the expiry of the US quantitative easing programme, and we could be in for a period of underperformance as traders reassess the commodity outlook. If the market ends up taking a negative view of metals and minerals, that is likely to hit the mining sector as whole. But recent issues at ENRC could, we fear, make matters worse for this particular stock. Sell, says the Independent.Arden is becoming the first port of call for Indian businesses looking to raise cash in London that aren't quite big enough for bulge-bracket firms. Arden earlier this year came up with a trading update which had analysts scurrying to up forecasts. It should be borne in mind, that as recently as last year they did the opposite after a profits warning. So earnings, and the shares, will be volatile. What's more, a valuation of 23 times forecast looks fancy enough. A speculative buy, according to the Independent.Hampers now account for less than 5% of Park Group's sales. Instead, the company is concentrating more on pre-paid vouchers that can be redeemed at a range of retailers. The company is stuffed full of cash and can afford to jack up the dividend by 29% to 1.7p, with a final payment of 1.2p. The dividend looks set to rise further and the shares yield a prospective 3.8%.Worth tucking away if you can find them, says the Times.With the performance of the UK commercial property sector linked closely to the performance of the underlying economy, it is no surprise the uncertain outlook is dividing investors' opinions. Is this, however, reflected in the "rating" of the F&C Commercial Property Trust (FCPT) and UK Commercial Property Trust (UKCM) where the share prices are trading at a 12% premium to the underlying net asset value? Does the prospect of a generous dividend yield and a combination of lacklustre net asset value and dividend growth merit paying such a hefty premium? The Scotsman would argue that it does not.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.---RG
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