Newspaper Tips & Round-Up

LONDON (ShareCast) - Water utility Pennon operates away from major manufacturing centres and has been hit less by the newly unemployed defaulting on their bills. SWW's bad debts were only £1.8m in 2008, according to yesterday's preliminary results. Pennon's shares have touched the dizzy heights of 658p in the last 12 months. The Independent expects to see them in similar territory before too long. Buy.

Recommending a water company ahead of an Ofwat review — the regulator's proposed new pricing regime through to 2015 will be published in July — carries above-average risk. However, Pennon has the lowest debt costs in its sector and a rock-solid dividend, providing a 4.4% yield at yesterday's 481¾p. Buy adds the Times (1832.HK - news) .

Barclays (LSE: BARC.L - news) ' management avoided handouts from the Treasury, so they must be pretty confident that their balance sheet is not in danger of crumbling. However, The Telegraph prefers investing to high-octane gambling and, despite the potential for good long-term gains, prefers to stay away from the sector for now. Shares in Barclays are an avoid it says.

Clothing and soft furnishings outfit Laura Ashley said that sales in the first 17 weeks of the year increased by 8.4%, despite the tales of acute woe from most others in the sector. Even so, investors should give it until at least the year end before buying, especially with the unemployment rate not expected to slow for some time. Hold for now says the Independent.

Penna Consulting, a human resources company, posted impressive full-year results yesterday, with profits up a striking 176 per cent. All-importantly, the total dividend will rise 6p, up from 2p last year. However, wait to see if the shares fall back after yesterday's gains before buying suggests the Independent.

Yesterday's 20% upgrade to Penna (LSE: PNA.L - news) 's profit forecasts should provide sufficient momentum for now. The longer-term draw for shareholders is that unemployment tends to carry on rising long after GDP has returned to growth. At 192½p, up 25p, or nine times current-year earnings, hold on for more adds the Times.

Hamworthy (LSE: HMY.L - news) , the Poole-based company that develops technology to transport liquids at sea, said yesterday that new orders had tumbled from £117 million to £61 million over the past six months. The timing of recovery is uncertain, but, at 233½p, up 22½p, or less than eight times earnings and yielding nearly 4%, the gloom is priced in. Hold says the Times.

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