Sunday tips round-up: Royal & Sun Alliance, William Hill, Roc Oil
Everything Royal & Sun Alliance is doing makes sense, which is probably why the shares have outperformed the insurance sector by 26 per cent since the start of the credit crisis last July. On around eight times 2008 estimated earnings, the shares trade on a 10 per cent premium to its peers.
There are cheaper stocks elsewhere - take Munich Re for example - but for those seeking UK exposure, Royal & Sun Alliance had traditionally been seen as a more defensive stock. Buy for the long term, says the Sunday Telegraph.
William Hill's share price has fallen 40 per cent since October, a healthy dividend yield of 5.7 per cent should prove attractive and gambling is historically the place to be when the economic storm clouds are gathering. But paper is not enough and the odds seem too heavily stacked against the bookies for now. Hold, says the Sunday Telegraph.
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Roc Oil should this year benefit from higher oil prices and stable production and is currently drilling wells in Mauritania, China, Angola and Australia. It is now one of the cheapest shares in the oil sector, trading at a 25 per cent discount to Oriel Securities' net asset value estimates, so any good news in the pipeline should fuel a rise in the shares. Buy, says the Sunday Telegraph.
St James Palace's has managed to lift its total dividend for 2007 by almost 18 per cent to 4.3p. As the company is 60 per cent owned by HBOS, this should provide some support for the group should it fall much further. Dresdner has a generous 390p price target and a buy rating on the shares, saying that short-term risks remain ahead, but these are very much priced into the shares. Hold on, says the Sunday Telegraph.
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