Friday tips round-up: Rio Tinto, Rolls-Royce, Diageo...

Rio Tinto, which in the bad days of spring 2009 had debts of $39bn (£24.2bn) after the badly timed purchase of Alcan in 2007, exited last year with just $4.3bn of borrowings, or gearing of 6%. It generated a record $23.5bn of cash last year, up 70% on 2009. This is by any standards a staggering turnround. The shares have rocketed by 60% since the summer and were due a little profit-taking. Yesterday's dip looks awfully like a buying opportunity says the Times.Sir John Rose is leaving Rolls-Royce with the company in fine fettle, a few problems with its Trent 900 engine notwithstanding. The engine failure on a Qantas Airbus is properly provisioned for, and the 2010 results indicate why Rolls-Royce is one of Britain's premier manufacturers. The shares have risen by 40% over the past year and now sell on 15 times this year's earnings. At this level, progress could be limited in the short term. But the prospects for growth, and the much longer-term promise from nuclear new build once this finally takes off, mean they are well worth hanging on to says the Times.One analyst described Diageo's 2% organic operating profit growth as a "significant miss", compared with consensus estimates of a 6.5% rise for the half-year to December. On a geographical basis, Diageo wobbled in Europe, where net sales tumbled by 13% due to the economic woes in Greece, Iberia and Ireland. Even after yesterday's fall, its shares still look pricey, trading on 14.6 forecast full-year earnings. It's time to drink up and go home. Sell says the Independent.Conditions are pretty good for investment adviser Hargreaves Lansdown. Equity-linked savings are in vogue with its clientele thanks to all time low interest rates and rising equity markets. So sales should be healthy for the next few months at least. Trouble is, the shares reflect that, at 29 times forecast full-year earnings. HL is a very high-quality company with strong management but take profits now and buy again on any sign of weakness in the shares. Take profits says the Independent.Packaging group Mondi confirmed profits for the year will come in "considerably higher" than the previous year, with basic underlying earnings in the range of 44 to 49 euro cents per share, compared with just 18.7c last time and analyst forecasts in the low 40s. On a a multiple of 14.3 times forecast 2010 earnings, dropping to 10.2 times for 2011, Mondi has plenty of headroom, even with yesterday's boost. Buy says the Independent. The recent trading update from Vodafone confirmed that everything was on track and the shares remain an excellent investment for income seekers. Trading on a March 2011 earnings multiple of 10.7 times, falling to 10.5 in 2012, the shares remain a buy for the dividend - and potential growth says the Telegraph. Reckitt Benckiser predicts a slowdown in growth during 2011, with guidance for a 4% rise in like-for-like revenues excluding its acquisition of SSL International in 2011, compared with 6% last year. This is a cautious target - and is what really spooked the market, prompting the shares to fall the most in two years. They are trading on a December 2011 multiple of 13.9 and yielding 3.6%. Given the headwinds, a hold, down from buy, says the Telegraph.Thomas Cook shares hares are trading on a September 2011 earnings multiple of just 7.7 times, falling to 7 next year. This looks far too low - even though the travel company could have a difficult time boosting margins. The prospective yield is a very attractive 5.6% this year and 6% next year. 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.