Newspaper Tips & Round-Up

LONDON (ShareCast) - Aside from a secure and rising dividend, Stagecoach's appeal has been an operating performance consistently better than its peers. But its exposure to falling UK rail revenues, a potentially protracted legal spat and this month's revelation that Stagecoach paid £1.2 billion to secure the SWT contract — twice the offer of the nearest bidder — must undermine that allure. At 127¾p, up 10p and at nine times earnings, avoid, says the Times (1832.HK - news) .

Meanwhile, the Independent thinks that on paper, Stagecoach is a great stock, and a positive outcome to its fight with the Government over the contractual rights to certain revenues under its franchise to run South West trains should send the shares soaring. In the meantime, a dividend increase will keep investors going. Buy.

Kesa is cheap, the group has got cash and thinks most of its losses are due to start-up costs relating to new businesses. However, the Independent would argue that in these worrying times, punters should be looking for companies performing solidly and with a clear idea of what will happen in the next year. Buyers would get neither from buying Kesa. Avoid.

Northern Foods (LSE: NFDS.L - news) ' restructure appears to be working. Northern issued eight profit warnings in the first five years of this century - but there have been none since its reorganisation started three years ago. The shares are now trading on a March 2010 earnings multiple of 8.8 times, falling to 7.6 in 2010. This does not look too demanding after its recent restructuring. With a cracking yield to support the shares, they remain a buy despite the relatively low dividend cover, says the Telegraph.

Apart from making semiconductors, Intel (NASDAQ: INTC - news) might consider a sideline in investing. In the week since the Californian chip giant raised its stake in Imagination Technologies (LSE: IMG.L - news) , shares in the British company have risen by 66 per cent — 34 per cent on Wednesday alone. However, at 153¾p, up 39½p, there will be better times to buy, says the Times.

Avocet shares are cheap and should be doing better. They will get a kicker if the news in September is good, but so far, however, Avocet has largely been long on promises and short on delivery and the Independent says it would wait for some sure-fire news before buying in. Hold.

Consort Medical (LSE: BPK.L - news) 's shares have been held back by uncertainty over the 8 per cent stake held by Kaupthing, now in administration. At 391p, or nine times earnings, and yielding 5 per cent, the shares are a bet on chief Glenn's turnaround efforts. A strong balance sheet, a low valuation and progress to date give him the benefit of the doubt. Buy, says the Times.

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