Friday tips round-up: National Grid, AstraZeneca, WH Smith
In troubled times, investors seeking defensive stocks would do well to take a look at National Grid.
It operates in the politically charged utilities area, but it has none of the exposure to wholesale energy markets that the likes of Centrica or the oil majors have. The shares look cheap in the current climate. National Grid has plenty of low-risk potential to attract any saver. Buy says the Times.
Analysts believe that the WH Smith's travel division is fundamentally undervalued and could attract a potential bid. This should be enough to provide support to the shares over the coming months, particularly given that the stock has fallen 28% since May last year. Questions over future growth remain but at ten times earnings, the shares are worth holding on to for now says the Times.
There seems little catalyst that will drive Smith shares much higher in the short term, but on a long-term view and trading on a prospective multiple of under 11 times, the Telegraph thinks they may be worth a look.
At 4.4%, Vodafone's group organic revenue growth beat expectations and the door was kept open to a possible full-year forecast upgrade down the line. Meanwhile, the group is poised for more potentially fruitful deals this year in growth markets including Africa and Asia. Trading on a price-earnings ratio of 14, the shares are not cheap. But in the current environment they should be held says the Times.
On 15 times earnings, falling to 13.6 for 2009, the shares are fairly valued, and the prospective dividend yield of 4.1% reflects what an awesome cash machine the company has become. In these troubled times, Vodafone looks like a fairly safe haven. Hold on says the Telegraph.
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While Vodafone has continued to grow its services it has also acted to keep a tight grip on costs. The shares have risen 30 per cent since bottoming out at 134p last year. They have further to go. Buy says the Independent.
Intensifying price competition and generic rivals will put AstraZeneca under sharp pressure in the next few years, while new launches are still uncertain. That helps explain a forward p/e for 2008 of less than 10 times, suitably cautious for a company that will suffer clear commercial pain before any possible medicinal gain says the FT.
The big issue for Carluccio's is whether it is sufficiently different from other eateries to weather the storm. The signs look reasonably encouraging. Carluccio's weakened yesterday where it sells on 17 times forecast earnings for 2008. A fairly safe hold says the Independent.
ITM Power floated in 2004 with the tantalising promise of developing hydrogen fuel cells. The growing demand for efficient forms of renewable energy has placed great pressure on ITM to succeed. Listed at 50p, the shares have been volatile, reflecting progress, or lack of it, at various times. At this stage they remain one for investors happy to take a punt on a renewable energy company finding a commercially successful product. Speculative buy says the Independent.
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