Thursday tips round-up: Bunzl, Direct Line, Real Good Food

Bunzl is a boring investment but in these markets, boring is good, according to The Times' Tempus column.As a note from Numis Securities on Wednesday highlighted, there is little that is boring about a share price that has risen by 25 times over 23 years. The latest trading statement from Bunzl also suggested there was little to hinder growth in revenues and profits.Bunzl, which distributes a range of disposable products including toilet rolls and plastic cutlery, has seen underlying growth come in at above the level of gross domestic product growth."So what is there not to like? Bunzl shares, off 10p at £12.46, sell on a hefty 16 times earnings, high for such a mundane business, and the yield, at 2.5% is not much to speak about. Still, this is a great defensive stock to hold in these times," Tempus said.Those involved in the floatation of insurer Direct Line last October are likely to be looking back with satisfaction as shares are up by almost a third on the offer price and have outperformed rivals Admiral and RSA, the Financial Times' Lex column reported. But the shares are at a discount to Admiral, partly reflecting an overhang and higher costs at Direct Line. Operating expenses were 26% of gross premiums last year so it came as little surprise that Direct Line's shares jumped 4.0% on Wednesday as the company announced another round of cuts. The latest cuts, which will mostly come from reducing its headcount, will bring costs down to £1.0bn. "The cost line is important because advances in premium income cannot be taken for granted," Lex said. "If revenue growth is not going to sustain Direct Line's impressive start, the heavy lifting will have to come from further down the profit and loss account."Real Good Food (RGF) has sales of more than a quarter of a million pounds but a market capitalisation of less than £30m. The Times's Tempus said the reason for that may be because it is making wafer-thin margins and is overlooked by the market. The company, which owns the Whitworths sugar brand and supplies cakes and patisserie to Waitrose, is undergoing a reorganisation in an effort to double its turnover within three years. A year ago the company made a deal with the largest producer in Mauritius, which raised its stake to 20% and secured supplies. This combined with a new import facility in Britain will mean an additional £350m to £400m of turnover by 2015-16. "In all this, the results for the year to the end of March are a work in progress," Tempus said. "RGF is not followed much by analysts, but this could change if those growth plans bear fruit. For now, the shares sell on a paltry six times earnings. Potentially interesting, if not for the risk-averse."RDPlease 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.