Wednesday tips round-up: ARM, Reckitt Benckiser, Cineworld
ARM Holdings cheered investors yesterday when it outstripped consensus estimates on its profits before exceptional charges at a time when the semi-conductor sector is suffering as a result of massively reduced demand for gadgets and consumer electronics.The company has also increased its margins by slimming down its operations, including the closure of a factory in Belgium. But, related charges of Ł6.5m was largely responsible for pre-tax profits tumbling from Ł15.8m to Ł7.7m. The shares have performed well, but the Telegraph’s Questor believes there could be significantly more upside potential.
With little prospect of substantial sales growth in Europe, its biggest market by far, Reckitt Benckiser has to convince that it can deliver on margins, too. The company is also promising several important launches next year, both new products and additions to existing product lines. Until there is more clarity on whether these are genuine, first-to-market innovations, hold, says the Times.
The festive season is anticipated as eagerly by Cineworld as by any four-year-old waiting for Santa. After a mediocre third quarter, which suffered from comparisons with last year’s musical smash Mamma Mia!, crowd-pleasers such as A Christmas Carol, featuring Jim Carrey as Scrooge, are expected to pack in punters again. The share price, up 45 per cent this year to 151p, or 9.8 times expected 2009 earnings, reflects much of the positive aspects of the story. A 6.3 per cent expected yield this year makes Cineworld shares worth keeping, according to the Times.
With net debt of Ł2m and a pledge to generate cash this year, there are companies in worse shape and the rating of Vislink's shares – 5.9 times 2000 forecast earnings , falling to 4.4 times next year – is undemanding. Duncan Lewis, the recently appointed chief executive, has focussed Vislink on news, law enforcement, marine and energy. The Independent is willing to give him the benefit of the doubt with a buy, but it is a speculative one – so handle with care. Speculative Buy.
Today's Headlines
ARM Holdings (ARM) | Price: 150.20p | Change: 0.54% Investment Column:Arm Holdings Questor:ARM Holdings Braemar Shipping Services (BMS) | Price: 395.00p | Change: 3.40% Investment Column:Braemar Shipping Services Reckitt Benckiser Group (RB.) | Price: 3,020.00p | Change: -2.14% Tempus:Reckitt Benckiser Vislink (VLK) | Price: 24.25p | Change: 1.03% Investment Column:Vislink |
| P/E: 44.1 | Div Yield: 1.5% 
| P/E: 7.0 | Div Yield: 6.1% 
| P/E: 18.7 | Div Yield: 2.7% 
No comments:
Post a Comment