Tuesday tips round-up: IQE, Velti, Shore Capital
IQE announced yesterday that it had signed a new contract with US semiconductor group TriQuint. For investors that are squeamish about the arms trade, TriQuint does supply the military industry with its communications technology and IQE's Nelson confirmed that some of the firm's wafers could find themselves in military equipment. Buy, says the Independent.
With Velti's modest £50 million stock market value putting it beneath the radar of institutions, it is hard to see what will drive the shares higher in the short term, says the Times.
Shore Capital is in decent shape, especially compared with some of its giant competitors, but ultimately its long-term health will depend on the length of the credit crisis and how long it will take for a recovery to take place. Hold for now, says the Indy.
If more investment banks go the way of Bear Stearns, and if the unemployment rate in the US, where 50 per cent of Wolseley's sales are generated through its US divisions Stock and Ferguson, continues to fall, 2008 could be a very tricky year. The fact that 100,000 Americans have lost their jobs in January and February will not be welcomed. Cautious hold, says the Independent.
Poor sentiment on consumer demand suggests that, even at 362½p, or nine times 2008 earnings and yielding 7 per cent, Headlam can be no more than a hold, reports the Times. The paper also says investors should hold off Imperial Energy says the Times
The Telegraph suggests a selection of stocks that that it feels should weather the current market turmoil:
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Reckitt is trading on 19 times forecast earnings - a slight premium to rival Unilever, which is on 16 times. However, this is justified due to its geographical spread, which has equal exposure to Europe, the US and the rest of the world.
Wm Morrison should benefit from any purse tightening as it is at the budget end of the high street chains compared with the more expensive J Sainsbury.
BAE may have a large exposure to the dollar but it is a solid company, its US electronics business and Saudi Arabian businesses have performed strongly and it has a good order book.
Although somewhat dull, safety is fundamental right now, making United Utilities a sound investment, especially as it is yielding a generous 6.6pc.
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