Thursday tips round-up: Bunzl, Rank, Johnston
Bunzl shares trade on a multiple of around 15 times current year earnings, which offers value in a volatile climate. In defensive markets, sometimes, a lack of excitement is no bad thing. Buy, says the Telegraph.
The Times writes, with further acquisitions and share buybacks following this year's £100 million of repurchases, Bunzl looks underpinned at current levels. Hold on.
They say the bookmaker always wins, but sadly for Rank the same cannot be said of bingo and casino operators. The sector has suffered the sort of luck to send even the most hardened punter rushing to join Gamblers Anonymous.
The good news is that Rank's casino licences are still a valuable commodity, while there are signs that the bingo industry's campaign for the abolition of VAT could come up trumps. At 101½p, or nine times 2009 forecasts, Rank is a buy, albeit a highly speculative one, says the Times.
(Article continues below)Advertisement
If 2008 earnings fall 20 per cent below forecasts, Johnston will sit at a still-attractive multiple of nine times. Regional newspapers are local monopolies, with minimal capital expenditure. On a 12-month view, there has seldom been a better time to buy, says the Times.
The Telegraph writes that it would be easy to look at Johnston's nine times earnings multiple and conclude that the stock can't possibly get any lower. Don't be fooled. It could. One for the brave only.
Engineering consultancy Scott Wilson is one company not quaking in its boots at the prospect of an economic downturn. The outlook is good with £280m of orders on the books already to keep the company busy through to next year. The shares are trading on around 12 times next year's earnings, which is an unjustified discount to the sector on around 15-16 times. Buy, says the Telegraph.
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.
