Thursday tips round-up: Prudential, Tullow Oil, Great Portland Estates
Prudential's shares initially jumped yesterday on speculation that Ping An, China's second biggest insurer, might take a £7bn stake in the British group.
China Life, the number one player in the country, is also looking to buy holdings in European or US insurers. Given its prospects in Asia, Prudential's shares are worth buying, says the Telegraph.
While Tullow's excitement lies in exploration, it is the forecast of flat production in 2008 that gives pause for thought. The company has squeezed all it can from Equatorial Guinea and the North Sea and faces the prospect of declining production in the medium term.
That makes Tullow more likely to sell peripheral assets to fund its growth or seek acquisitions with producing assets, perhaps accompanied by an equity fundraising. However, with imminent updates on Ghana and Uganda set to buoy the shares, they are worth keeping, writes the Times.
Great Portland Estates, the niche West End and Central London developer, may not have escaped the fall in property prices but the value of its assets has outperformed the wider market. The company likes to buy buildings in prime locations with low rents. It then refurbishes the property and raises the rent.
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However, investment should be for the long-term only. The dividend yield is just 2.3pc. Those wishing to capitalise on a bounce in property stocks can find better value elsewhere. Hold, says the Telegraph.
At 265p, or 16 times 2008 forecasts, RPS is still more expensive than the wider support services sector. But that seems only right given the prospect of 14 per cent earnings growth this year, and the likelihood of upgrades from bolt-on acquisitions. Buy on weakness, writes the Times.
Renishaw has launched Revo, a handheld measuring device, after an 18-month delay, to be followed shortly by Gyro, a cheaper version. Revo, which cuts inspection times by one third, has been well received by the likes of GE, Rolls-Royce and Hyundai and should trigger an acceleration in revenue growth in the second half of this year.
No engineer is immune from a manufacturing slowdown, but Renishaw, at 635p, or 15 times next year's earnings, is better placed than most. Hold, says the Times.
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