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Tuesday tips round-up: Lonmin, Cranswick, Amlin

Tue, 17th Nov 2009 06:39

Away from the Xstrata situation, there is little reason to get excited about Lonmin. The group suffered as platinum prices fell last year, and even as demand for the metal has improved, the strength of the rand in South Africa, where Lonmin has its operations, has not helped. The platinum miner said yesterday that production would be up at 850,000 ounces by 2013. That seems like an awfully long time. Avoid says the Independent.Delivering is what Robert Wiseman Dairies says it is all about - and it does not just mean the milk. The company has had a stellar half year, with earnings per share up a great big 86%. In reality, the impressive numbers are largely down to the recent demise of rival Dairy Farmers of Britain and the extra demand it has seen as a result. Robert Wiseman is transforming into a well-run and healthy business: just the sort we would want to back. Buy says the Independent.Weakness in Interserve, the services and maintenance group, has been overdone, in the Independent's view, particularly in light of the fact that while the yield stands at more than 7%, the shares trade on a multiple of 5.5 times. Buy.Shares in animal breeding specialsist Genus are trading on a June 2010 earnings multiple of 17 times, falling to 15 in 2010. The yield is 1.9%. Shares in Genus are a buy despite last week's warning, based on an eventual recovery of the US dairy market, Asian growth and the unstoppable trend of increasing demand for food says the Telegraph.After rising in the first half of the year to a record high, the price of pigs is now falling. This is bad news for pig farmers but good news for sausage maker Cranswick. After a great first half, margin improvements should provide a welcome boost in the second half. Trading on a March 10 earnings multiple of 11.2 times, falling to 10.2 next year. The yield is 3.3% and, with pork being conditioned as a value option compared to alternatives, the stance on the shares remains buy says the Telegraph. Brokers estimate underwriter Amlin now has about £500m of surplus capital ? about £200m of which could find its way back to shareholders. That is not unfeasible. At 376½p, or less than seven times next year's earnings, a prospective dividend yield of 5 per cent and the potential for more to come, buy on weakness says the Times.Moneysupermarket continues to show steady improvement. The three months to September 30 were its strongest quarter to date. Overall, it remains in line to meet full-year profit forecasts. At yesterday's 85p, or 16 times 2010 earnings, and the company sitting on £45m of cash ? even after the payment of October's £25m special dividend ? hold on for more says the Times.Disributor Diploma trades at a discount relative to larger peers, despite offering the same exposure to economic recovery. At 170¼p, or 11 times current-year earnings, and yielding 4.6%, buy says the Times. 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.

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