Friday tips round-up: Amec, Unite, BAE Systems

The industrial services group Amec is an easy tip - a fact confirmed by yesterday's first-half financial results, says the Independent.

With revenues up by 13% to £1.4bn, earnings before interest, tax, depreciation and amortisation up 20% to £114m, and the forward order book at a healthy £3.5bn, Amec says it is in no doubt it will hit its 8.5% margin target. And the company is upping its interim dividend by 20% to 7.3p per share. The share price has still gained convincingly this year and can be expected to head up beyond 900p again. Until then, Amec is a buy.

Unite, Britain's largest listed student landlord, expects rents to grow by as much as 4% over the full year, which, if achieved, would be a creditable performance given the uncertainty that continues to plague the outlook for the wider economy in general and the property market in particular. The shares trade on a 40% discount to broker net asset value forecasts. The wider sector, on the other hand, is on a discount of only 25%. Buy before that gap closes says the Independent.

BAE Systems shares are now below 300p and are pricing in a near-collapse in the group's business. This is very unlikely to happen. The shares are now lower than they were during the height of the financial crisis and are sitting at a five-year low. Several events in the next few months should bring clarity to the situation, including the Strategic Defence and Security Review in the UK. The shares are trading on an earnings multiple of less than seven and are supported by an impressive yield of 5.7%. Buy says the Telegraph.

Pools operator Sportech is concentrating on modernising the core business, as well as developing its electronic gaming operation. It also seems that crucial to its growth is diversification, with the proposed acquisition of Scientific Games Racing, which will do just that. Analysts see it as a good bet on a pro-forma price of five times full-year earnings, but it seems a bit early to pile in. Hold says the Independent.

BHP Billiton's full-year numbers were slightly below consensus. However, it still generated a staggering amount of cash over the course of the year. It also must be remembered that BHP's numbers include the last six months of 2009, a relative weak period for the sector, and the first six months of this year, which was strong. Whether BHP manages to bag PotashCorp or not, its growth story remains very strong. It's not even a story of rising commodity prices - it is a story of rising volumes, which is the best way to play the sector after last year's recovery in prices. Buy says the Telegraph.

Interim figures from IMI, which showed margins at record levels during the recovery from the worst downturn management can remember, saw the shares marked back 9p to 655œp. IMI shares sell on a little more than ten times this year's profits and their yield is approaching 4%. Not expensive for a company so geared for future growth says the Times.

A bid for Premier Oil is not out of the question. But on a core valuation, with the shares on about a 15% discount to net asset value, they are well up with events in the sector says the Times.

The trouble with being a world-spanning drinks behemoth such as Diageo is that, while this undeniably gives a huge degree of stability, it is hard to see where any significant upkick can come from. An undisputed world leader, but it is still a pure play on consumer spending and with the shares on about 13 times this year's earnings and yielding short of 4%, it is difficult to be excited about the short-term prospects says the Times.


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