Thursday tips round-up: Tate & Lyle, Severn Trent, Serverfield-Rowen
After the annus horribilis in 2007, most analysts have ceased to be worried about sugar producer Tate & Lyle. US investment firm Harbinger has built up a 15 per cent stake, even if their motives are unclear, and the company itself has been buying back shares. Hold for now, says the Independent. But the Times says take profits as the shares trade on 13 times next year's earnings, and with £1 billion of debt, there is little to drive the shares higher in the short term.
After several years of woe at water group Severn Trent, analysts at Merrill Lynch say: "We believe this retreat has exposed once more an attractive entry level ... notwithstanding its outstanding regulatory issues." Investors may opt to wait to see how bad the punishments are, so hold suggests the Independent. The Telepgraph agrees as the shares are supported by the outside possibility of a bid.
The Times recommends holding on to structural steel maker Serverfield-Rowen as the shares trade at less than eight times this year's earnings and yield 6.4 per cent. But the Telegraph says buy as it believes in the medium-term the shares are due a revaluation.
Russian steel group Evraz is not sitting in its laurels, and predicts revenues to increase by 60 to 65 per cent in the first half of this year. Investors should also consider the political risk of buying into Russian companies and should not readily forget the fate of Yukos, but the Independent says buy.
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Restoring the fortunes of Woolworths' retail business may be key to the long-term valuation - but in the short term it is dependent on how much chief executive Trevor Bish-Jones and his advisers UBS can secure from the BBC. Until the deal is completed, Woolworths remains a hold reckons the Telegraph.
Technical contract staff recruiter Morson carries £35 million of debt - a legacy of private equity ownership, which means interest charges are £2.2 million, a fifth of pretax profits. On that ground, avoid the shares says the Times.
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