Friday tips round-up: BAE Systems, Reed Elsevier, Morgan Crucible

BAE Systems shares are trading on a December 2010 earnings multiple of just 8.5 times, which is a discount to US peers.

For example, General Dynamics is trading on a current-year multiple of 10.6 times. If BAE shares were rated at the same level as this equivalent US business, the share price would be in the order of 435p, some 21% above the current share price. Buy says the Telegraph.

Reed Elsevier will feel the effects of the recession especially keenly in the first half of the year as companies in other sectors struggle. The company did well to hold its dividend at 20.4p this year. However, trading at 11.5 times earnings, it looks far from cheap. Hold says the Times.

Mark Robertshaw, chief executive of Morgan Crucible, is pushing a simple message to the City today: "We are a completely different business." With the final dividend maintained at 4.5p, giving 7p for the year, the closing price last night of 169œp yields an attractive 4.2 per cent. Engineering businesses are geared well for a global recovery and well-run companies more so. Continue to add says the Times.

The shares trade at a shade under 12 times 2010 earnings and could enjoy a re-rating once sales growth kicks in. That might not be as far away as the sceptics think. Buy says the Independent.

Cancer drug developer Antisoma is still loss-making. Its first-half pre-tax loss tripled to £21.3m as it made no revenue but it will record revenue of about £20m in the second half from the sale of fludarabine, a leukaemia drug, to Sanofi-Aventis. There is also the prospect that Novartis will snap Antisoma up if AS404 is successful. At 35œp, down 1p, take a look if you're feeling brave suggests the Times.

Ladbrokes took a kicking yesterday after what looked like a dispiriting set of results. Its revenues fell to £963.7m from £1.05bn a year ago, while profits before tax dipped from £265.6m to £191.3m. The shares are not cheap. on 13.1 times forecast 2010 earnings, much more expensive than, say, William Hill. But there is potential enough to continue holding says the Independent.


Please note: Digital Look provides a round-up of news, tips and information that is impacting share prices and the market. Digital Look cannot take any responsibility for information provided by third parties. This is for your general information only as not intended to be relied upon by users in making an investment decision or any other decision. Please obtain a copy of the relevant publication and carry out your own research before considering acting on any of this information.