Tuesday April 15, 06:49 AM
Tuesday tips round-up: Rentokil, Sage, Punch
LONDON (ShareCast) - At the current price, pest control specialist Rentokil Initial (LSE: RTO.L - news) trades on around 11 times earnings.
Even if former ICI (LSE: ICI.L - news) chief executive John McAdam halves the current dividend, they would still yield 4.1pc. Worth a small wager on a Compass-style recovery, reckons the Telegraph. Buy.Investors need reassurance that restructuring is complete for software firm Sage to achieve the 10 per cent annual organic growth that management is aiming for. Expect the yield to improve on continued share price weakness, as fears build over the long-term health for economies on both sides of the Atlantic. Avoid says the Times (1832.HK - news) . M&B is mulling a bid for Punch's managed pubs business Spirit and, although this saga has some way left to run, one thing looks assured. Punch will be in the mix and, given its strong negotiating position, its share price should see the greater upside, so buy says the Telegraph. At 91p, NHS-focused recruitment specialist Healthcare Locums (LSE: HLO.L - news) is off last year's high of 110p and trading at a reasonable seven times expected earnings. With chronic shortages of social workers and healthcare staff the Times says buy. Bulgarian property developer Orchid Developments said that the global financial crisis should not affect its local market. But betting that Bulgaria is immune from the global market is risky, so the Times says avoid.
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