Thursday tips round-up: Reckitt Benckiser, BHP, Future

Many of its products are associated with ailments or household chores, but the consumer products giant Reckitt Benckiser yesterday showed it is in rude health. Shares in Reckitt are not cheap and trade on a forward 2010 price-earnings ratio of 15.6.

But it remains one of the world's premier consumer goods companies and, in the long term, the Independent believes its cash generation, growth potential and dividend policy makes its worth putting in an investment shopping basket. Buy.

Six months ago, when everyone realised that the end of the world was not, in fact, nigh after the fallout of the financial crisis, mining stocks started to stage a dramatic recovery. Anyone keen on the mining sector would do well to put their money into BHP - the group is about the most well diversified in terms of assets, while rising commodity prices should support its share price. Buy, says the Independent.

Last month's profit warnings from Electronic Arts and Game Group told of tough times in computer games. So, too, did yesterday's trading update from Future, the small-cap publisher of Nintendo Power and the official Xbox and PlayStation magazines. Even so, at 19Ÿp, or 11 times earnings and yielding 4.6 per cent, hold on, says the Times.

You need a lot of corrugated boxes lying around to prevent a hard landing - and the collapse in demand for what in the industry they call "containerboard" prompted investors to fall out of love with Smurfit Kappa during the depths of recession. Smurfit should be a beneficiary of improving European and Latin American economies and its discipline on costs indicates its own recovery should outpace its peers. At EUR6.63, the shares have farther to run, says the Times.

Despite the lack of a dividend and the current loss-making nature of the business, the Telegraph's Questor likes Avanti Communications and its medium-term prospects. The shares were recommended on January 8 at 467œp and the shares are up 3pc compared with a market down 7pc. The rating on the shares remains buy.

CSR remains cautious on consumer spending, but, with the company sitting on $412 million of cash, the shares, at 477Œp, or less than 12 times earnings, are still not stretched. Hold, says the Times.


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