Friday tips round-up: National Grid, Unite, BG

National Grid prides itself on a highly risk-averse business model, and yesterday's half-year results go some way to vindicating the strategy.

And there is plenty more to come. The integration of the $12bn purchase of KeySpan in 2007 is not yet complete but is on track for $200m-worth of annual savings by 2011. It is also shielded from any regulatory risk until 2012 in the UK and has either filed or is putting in place new rate plans for 60 % of its US assets. Buy says the Independent.

About 95% of Grid's earnings are regulated, but the group has unregulated exposure through its liquefied natural gas (LNG) terminal on the Isle of Grain, in Kent. Eventually, the terminal is expected to handle 20% of the UK's imported gas. However, it is not the prospect of capital gains that is the main reason to own these shares - it is the group's impressive income stream. Buy for the dividend suggests the Telegraph.

Grid remains well funded for as far out as its followers might reasonably expect - as underlined by recent reaffirmation of all three of its credit ratings. At 645œp, up 5œp, or 11 times current-year earnings, and yielding 6%, the shares are a solid hold adds the Times.

Don't look to PayPoint to deplore the postal strike. Recent ructions in Royal Mail have played straight into the hands of the FTSE 250 over-the-counter cash payment network operator. It retains £32m of cash and with its medium-term growth prospects and with a 4.4% yield, at 488p it is too soon to check out says the Times.

Shares in environmental services consultancy AEA Technology faded by 8% yesterday as pension fund concerns returned to the fore. As its outlook for non-US sales is more cautious, irrespective of the outcome in Copenhagen, at 28p, or 13 times earnings, take profits says the Times.

Things are looking for up for Unite, the student housing specialist, which issued an update yesterday. Rents between July and 18 November grew by 9.7 % on a like-for-like basis, as the UK student population continues to grow. The valuation metrics also look good, with Cazenove forecasting 326p in net asset values for 2010, compared to an estimated 290p for the current year. Buy says the Independent.

PR firm Huntsworth's shares have been on the slide since the middle of September and now trade on about 8 times this year's forecast earnings, with a prospective yield of 4.4%. Given the risks, that's probably about where they should be. So hold says the Independent.

There was some more good news from BG yesterday. The company said that a test well in Brazil showed record productivity. The tests were on the Iracema appraisal well in the Tupi area. BG Group owns 25% of the venture, with Petrobras having 65%and GALP 10%. The discoveries in the Santos Basin continue to look significant and news from the area has been good. The high flow rates mean that the costs of extracting the hydrocarbons from the deep offshore area are lower. Buy says the Telegraph.


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.