Thursday tips round-up: Wolfson, Glaxo, Lamprell

Accident-prone Wolfson has stumbled again. Fourth-quarter trading was encouraging in terms of revenues, but disappointing, for understandable reasons, on margins. The story at Wolfson has been of a recovery from the annus horribilis of 2008, when Apple scrapped its contract to supply relatively unsophisticated audio chips. Yesterday the company reported only the second quarterly profit since then. Furthermore, gross margins, down year-on-year from almost 50 per cent to 43.9 per cent are set to fall further, to about 41 per cent this quarter. Nevertheless, margins can only improve to more normal levels from here. As well, the last quarter was a record for the adoption of its range in new models, which will feed through to earnings as these hit the shops. Much was made this week of the doubled share price since May of ARM, a larger chipmaker. Wolfson shares were up by almost 60% since the start of last year, albeit with the odd downward lurch, before they fell 12 3/4p to 185 3/4p yesterday. The earnings multiple for this year still looks a silly one, but things are moving in the right direction and the shares offer value in the long term, The Times's Tempus says on Thursday morning. Since the start of 2012, GlaxoSmithKline has submitted six drugs for approval by the US Federal Drug administration and European regulators, including treatments for chronic obstructive pulmonary disease, various cancers, HIV and diabetes. Also, Phase III data is expected on 14 assets in 2013 and 2014, including on nine new drugs and vaccines. In Phase II trials, the treatment is given to thousands of people to confirm its effectiveness, monitor side effects and compare it with commonly used treatments. Unlike peer AstraZeneca, Glaxo has a large consumer healthcare division which produces branded consumer products such as Sensodyne, Boost, Horlicks, and Gaviscon. Not only that, the company is increasingly taking its products into emerging markets to play the consumer boom that is under way in these fledgling economies. This has been keeping sales buoyant while the group travelled over the patent cliff. The dividend yield, at 5.4%, is attractive and safer than AstraZeneca's. Because of this income and the movement in its pipeline of new drugs, The Telegraph's Questor team keeps a buy. A total of five profit warnings in six months must be some sort of record. Shares in Lamprell plunged from 366 1/2p in May last year to a low of 63p in November. The oil rig maker's woes ranged from slippage on important contracts to late deliveries of vessels. The news flow since has been entirely positive. Talks with lenders were going well and a trading statement indicated plenty of work coming through on rig refurbishments. Yesterday the company announced the award of a contract, worth in the range of $150m to $170m, to produce a new rig, the second for the same Singapore client. There is an option to build a third, so at least one big customer has confidence in the company. Lamprell will still produce horrendous losses of well over $100m for 2012, while this year will offer little better than a flat result. "The rules of the game are that I am not allowed to shuffle my portfolio mid-year but, if I were a real investor, I would be tempted to take some profits at this stage," Tempus writes.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.AB Glaxosmithkline