Friday tips round-up: Go Ahead, Thomas Cook, McBride...

Go-Ahead, the bus and train operator, produced a set of full-year results ahead of City forecasts yesterday that showed that many of its cogs are turning rapidly.

The road ahead could contain a few potholes, however. For instance, the company's operations rely heavily on commuters in the south-east of England, who could be hit by a renewed slowdown in the economy. Thanks to a surge in the shares yesterday, Go-Ahead now trades on a multiple of 10.5 times 2011 forecast earnings. That's probably about fair value, but hold for the 7.4% yield if nothing else says the Independent.

The recent spate of smaller travel companies going bust has generated headlines in the press and is likely to spark a flight to quality for holidaymakers. Thomas Cook is a well-capitalised ATOL-protected tour operator which has been around for a very long time. No one wants to risk their hard-earned holiday, so high-profile holiday firm collapses work in its favour. The yield on Thomas Cook shares is also very attractive. The shares are currently paying out 5.7%, with this expected to rise to 6.2% next year. The current-year earnings multiple is 7.3 times, falling to 6.8 in 2011. Buy says the Telegraph.

On Tuesday, the African-focused group Afren confirmed that its key Ebok field will enter production in the final quarter of the year and more than double the company's total output. Ebok is expected to add 35,000 barrels of oil equivalent per day (boepd) to production, compared with current output of 20,397 boepd. Although there is some risk with all explorers, the company's management has been delivering on its strategy. The shares remain a buy says the Telegraph.

McBride, Europe's biggest maker of retailers' own-brand household cleaning and personal care products, hit a bit of a sticky patch in the summer. Some brokers believe McBride can make up the lost ground, but the Independent is more cautious. Hold.

McBride has tightened up on its procurement strategy and has also been exiting some less profitable lines, but profits this year will be well down, after a 36% bounce at the pre-tax level to £48m in the year to end-June. One broker expects the higher costs of materials to clip £10m off this year's profits, though £4m should be clawed back from other cost-cutting. The outcome of negotiations with the retailers is too soon to call. The shares sell on 10 times this year's earnings but offer few short-term reasons to chase, adds the Times.

Abbey Protection, where interim pre-tax profits were up 11% to £4.7m yesterday, sells insurance against legal and professional services fees incurred by small and medium-sized business. In this environment we believe businesses will take the hit now by buying insurance to avoid a potential nightmare in the future. Buy says the Independent.

The Restaurant Group may not have the most illustrious brands, but Garfunkel's, Frankie & Benny's, Chiquito and Brunning & Price are clearly the place to be. Like-for-like sales were flat, but the rest of the first-half numbers were strongly positive. Investors should also be encouraged by yesterday's bid for Carluccio's and the recent approach to Clapham House Group. While Andrew Page, the chief executive, insists he had received no approaches, the renewed appetite for the sector highlights its attractions. The shares are on about 13 times this year's earnings. Hold says the Times.


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