Wednesday tips round-up: International Power, Inmarsat, Antofagasta

International Power's attraction is that it is well placed to take advantage of short-term improvements in power prices.

Many of its power stations are so called "peaking" plants that can be fired up at short notice when demand suddenly outstrips supply. It is growing in the Middle East and Asia, has stepped into Canada and has its eyes on expanding in North Africa. In the longer term, it will also benefit from the enforced retirement of much of Britain's generating capacity amid tighter emissions standards. But at 331Ÿp, up 3Œp - or 11 times earnings and yielding 3.8%- it is IP's allure as a takeover target that is the strongest reason to hold on says the Times

Satellite operator Inmarsat should carry on growing at speed. Through the launch in June of its first handheld phone, the company aims to capture a large slug of a $350m market. Recent US federal moves to free up telecoms spectrum should also work in its favour: capacity constraints caused by rapid smartphone adoption has seen American mobile operators approach Inmarsat to piggyback their services on its network. At 768p, or 20 times 2011 earnings, hold says the Times.

Copper miner Antofagasta trades on a pretty average 2010 price to earnings multiple of 15.6 times, and even though the dividend yield is an anaemic 0.6%, investors have seen strong appreciation in the last 12 months. Hold for now says the Independent.

Fund manager Gartmore put a positive spin on its prospects yesterday. It took in more net money in the first three months (£273m) than for the whole of last year, when the figure was £252m. The shares are not expensive, sitting on a multiple of just 10 times this year's forecasts (the sector's on 13 times), although given the debt and lack of divvy, that is not undeserved. However, wait and see Gartmore show a record of making money for its investors rather than just staff and management beforeinvesting. Avoid for now says the Independent.

aAfter the apathetic reception given to Gartmore's float, it is hard to see what - other than strong gains for equity markets - will send them higher. Indeed, the 24% stake retained by Hellman & Friedman, Gartmore's American private equity backer, is likely to act as an overhang. Wait until May, when that lock-up expires, before looking to buy in adds the Times.

Midlands-based industrial group Hill & Smith has weathered the downturn pretty well - and its focus on cash management has put it in a strong position. Revenues fell by 7% to £389m, but pre-tax profits rose to £39.7m from £35.1m in 2008 - hitting a record high in one of the toughest years the industry has seen for sometime. Trading on a December 2010 earnings multiple of just 9.2 times and yielding 3.3pc, the stance remains buy says the Telegraph.

Wind turbine blade maker Clipper Windpower remains a risky proposition, and its past is not an altogether happy one, so this is not one for cautious investors. But with a new chief executive the shares can move on from here and it is a speculative buy says the Independent.


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