Tuesday tips round-up: Kesa, Serco, Lloyds Banking

The City's bearishness on Kesa shares partly reflects concerns over the tough trading environment that Comet faces in the UK.

Furthermore, the City's UK-centric view glosses over the fact that Darty continues to deliver the bulk of the group's operating profit. Therefore, along with an improved performance in its developing businesses, such as in Italy, Spain and Turkey, investors could score by focusing on the bigger, long-term picture at Kesa. Buy says the Independent.

Serco's recent share price fall has occurred amid concerns about the impact of widespread public spending cuts in the UK. With most government departments facing average budget cuts of 25%, traders fear there will simply be fewer contracts for outsourcers to win. It is hard to justify picking up more of the shares when they are trading at 16.6 times 2010 earnings and a dividend yield of 1.3%. Hold says the Telegraph.

A company that specialises in renovating run-down estates and industrial sites, St Modwen Properties has needed a fair bit of refurbishment itself over the past couple of years. A £105m cash-raising a year ago banished the wolf from the door, and the company has just announced its first profit and dividend since 2007. The shares are on a 25% discount to NAV. But there seems no reason to chase them at present says the Times.

Property group St Modwen currently trades at about a 25% discount to net asset value. While St Modwen is a well-run group, the market is concerned about the spectre of George's Osborne's axe. Be cautious on almost the entire sector. That includes St Modwen. Avoid says the Independent.

Lloyds Banking is cleaning up its act. When your list of misdemeanours, perceived or real, is as long as Lloyds's charge sheet this is not an overnight project, but the UK's largest high street bank is getting there. On Monday it took a major step by selling HBOS's integrated finance business - a significant slice of the business that got HBOS and then Lloyds into so much trouble - to private equity business Coller Capital. Buy says the Telegraph.

Next week's interim results could pave the way for the next leg-up for Domino's Pizza as the benefits of the company's promotions and the sponsorship of Britain's Got Talent on ITV are joined by what we expect to be a boost from the football World Cup. Those worried about the impact of a sluggish recovery need only revisit Domino's resilience during the slump. Buy says the Independent.

Bunzl's share price has declined since April as investors took profits from what had been an impressive run. The company has the financial firepower to crank up its acquisition programme without undue strain. The only question is the availability of targets. The shares now sell on about 11 times earnings, which seems about right. Any further price weakness would make them look attractive again says the Times.

NCC has two areas of operation. Escrow is a software insurance policy that provides a back-up repository. The second business, assurance, provides IT security. This, inevitably, is a growth area, given the seemingly unstoppable rise of online fraud and identity theft. NCC has been quoted on the main list for three years. It sells on about 11 times this year's earnings, not dear for such a strong business. Worth tucking away says the Times.


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