Broker snap: WPP is a 'low-risk growth play', says Galvan

Galvan Research and Trading has recommended to 'buy' shares of advertising and media group WPP, labelling the stock a 'low-risk growth play'.Last month, the company beat market expectations with its results for 2012, though frontman Sir Martin Sorrell did admit that its performance was "ugly" as a result of varying levels of growth.Revenues came in at £10.37bn, up 3.5% year-on-year and ahead of the £10.3bn estimate. Profit before interest an tax rose 7.1% to £1.53bn, while gross margins improved by 0.6 margin points to an industry-leading 16.1%."The highest gross margins in the industry speaks volumes for the WPP investment case, despite any quibbles over the uneven growth rate throughout the past year," said Andrew Gibson, the Head of Research at Galvan. "In fact, Galvan Research views the advertising giant as a poster child for geographically diversified low risk growth and this along with a 2.9% like-for-like sales growth figure easily earns the group a 'buy' recommendation."In terms of technical analysis, Gibson said that the shares have delivered a 50-day moving average rebound at 1,036p, well above the last 1,021p late February support."The implication is that while there is no sustained price action back below 1,000p we should see renewed progress towards the top of a rising November price channel top of 1,150p plus."The stock was up 1.62% at 1,066p by midday on Tuesday.BC