BEST SUPRATRADE STOCK PREDICT: Tips Watcher Alert (UK)

Thursday, July 23, 2009

Tips Watcher Alert (UK)

GlaxoSmithKlein should be a dead cert buy in the current climate. The twin drivers of the recession, which normally favours pharmaceutical companies, and swine flu, for which GSK has one of the only two recognised antiviral treatments, Relenza, should guarantee investors favourable returns over the medium term.

Shouldn't it? Unfortunately the markets are not so simple. Unless you are looking for a pure income play, the Telegraph thinks GSK is best avoided at present.

Currently Sportingbet is priced at 10.4 times forecast full-year earnings. It is pretty good at bookmaking, but that is high enough given that it is an offshore operator with a high degree of regulatory risk whose earnings are not showing a great deal of growth. Collins Stewart notes that its top line has been flat for fully six quarters. Given all this, those wanting exposure to the gambling industry should seek greener pastures. Sell, says the Independent.

Last week’s half-year production figures from Rio Tinto were always going to be a hard act for its erstwhile merger partner to follow and so it proved. Not that BHP Billiton’s numbers were bad. Rather, the performance of its iron ore operations could not help but look weak next to its rival’s forecast-beating display.

However, the broader attractions of BHP remain. As a financially strong and diversified play on a recovery in commodities demand, with the additional momentum provided by its exposure to oil and gas in the Gulf of Mexico and Australia, where about two thirds of its exploration budget is being directed. At Ł15.02˝, the shares, have risen more than 16 per cent since January to trade at 13 times next years earnings but should have farther to go. Hold on, says the Times.