Tuesday tips round-up: Intertek, Ultra Electronics, Xchanging

Intertek is the company you hire to determine whether the paint coating your mug is toxic. Or to find out whether Jeremy Clarkson's assertions about the mileage achieved by an electric vehicle are accurate. It is the world's largest provider of testing services. Good products, good management and access to growth markets mean that Intertek will be a core holding for many investment funds. Just don't buy it expecting a rampaging share price or massive share buybacks, says the Times. Although at first glance it may look a tad pricey at nearly 19 times forward earnings, it is important to remember that Intertek still lags behind its closest peer, SGS, which trades on more than 20 times, the Independent points out. The strong growth, coupled with the valuation gap, give us confidence to keep buying, the newspaper says.Ultra Electronics has been one of the great success stories of the defence and engineering industry in recent years. Indeed, the battlefield IT provider's market cap has risen by 50% to £1bn since the financial crisis. Western governments may cut back on new warships and fighters, but will have to upgrade and lengthen the life of existing equipment instead. That means new electronics and software systems ? and Ultra showed its confidence in the future by increasing its interim dividend by 10 per cent to 11.7p a share, the Times reports.The back-office outsourcing company that sponsors the Boat Race came close to capsizing six months ago, but Xchanging is afloat again with a new crew. The shares have doubled from their low point in February, even if chief oarsman Ken Lever caught a crab yesterday with first-half results coming in a little below expectations. It may take time for the dividend to be restored, but there is no reason why the company should not make 10p of earnings per share this year, putting it on a cheapish multiple of ten, the Times says.Although it saw a first-half revenue boost from its textile and pest-control businesses, Rentokil posted an overall drop in pre-tax profits last week. The problem is its City Link parcel delivery operation, which saw operating losses nearly triple to £17.8m after more than three years in the red. the shares, which have underperformed the market by 23 per cent over the past 12 months, are already pricing in a hefty slab of risk. So, although Rentokil Initial is one to avoid for the moment, it is worth watching nonetheless, according to the Independent.A profit warning is not the best way to start the year, but that is what happened with Hornby in January. Part of the cause was supply shortages, so the news - released with its full-year results in June - that the issues had been resolved was a major relief. House broker Numis is predicting a full-year pre-tax profit of £7.4m, which would be £3m ahead of the previous 12 months. Much will depend on Christmas, but the resolution of supply-chain issues, plus the expected boost from next year, points to a positive outlook for the shares, says the Independent, which has a 'buy' rating on the stock. 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.