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Wednesday tips round-up: Prudential, Drax, Britvic

Wed, 19th May 2010 06:45

If you can't afford the rights - or are unwilling to stump up the cash - the Telegraph thinks it is best to sell all of your Prudential holding alongside your rights, rather than be diluted out of the dividend and earnings to this extent. Sell up and walk away. Hopefully investors who do this will not have to crystalise significant losses, unless the shares were bought near the peak in 2000. If you can afford to take up your rights then you should do so. Mr Thiam's Asian adventure has a lot of risk associated with it - but if he manages to pull it off, growth should be impressive the paper suggests.Drax argues its argues that the share price is held to ransom by the "dark green spread", which is related to power prices. There may be investors that think it's a bargain, and it is certainly true that the shares are inexpensive at their current value. The group is also doing interesting work with biomass power. This will take some time to come online, however, and for now avoid says the Independent.Shareholders in Britvic will be hoping that its latest purchase will prove better than its last. But the share price reaction to the €237m takeover of France's Fruité suggests that investors are willing to give Britvic the benefit of the doubt. At 458¾p, or 13 times earnings, Britvic's shares trade at a discount to its sector and provide a 4.1% dividend yield ? not dear given forecast earnings growth of more than 20% this year. Hold says the Times.SSL, which also owns the Scholl footcare brand, reported headline sales up 25% to £803m. However, when currency movements and acquisitions were stripped out, underlying sales advanced by less than 2%. SSL is virtually debt-free but at 818½p, down 6½p, the shares trade at 21 times current-year earnings and offer a negligible 1.3% dividend yield. Pass says the Times.The Independent says question is whether SSL's premium is justified and says given the uncertain economic picture, and increasingly volatile market backdrop, it is. SSL's products are unlikely to go out of fashion anytime soon. Buy.Schools software group RM is operating in an excellent global market and the shares look undervalued, but uncertainty over education budgets will limit gains. Still, supported by the 3.6% yield, buy says the Telegraph.Range Resource's assets in Somalia could be highly lucrative and shareholders would have a day to remember if the project holds as much oil as the company hopes. The market is yet to price in the project. Buy says the Independent.Bookmaker Paddy Power continues to benefit from its heavy investment in "specials" but it is its aggressive online strategy in international markets that will drive its growth and dilute any negative impact from the threat of an online betting tax in its home market. At €26, or 13 times earnings, 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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