Wednesday tips round-up: Severn Trent, William Hill, Enterprise Inns

The betting is the water industry as a whole will have little trouble outpacing the regulatory settlement, while Severn Trent will actually do better than most if inflation climbs. The sector remains a strong defensive play, and Severn shares are themselves yielding about 5.2% on this year's lower payment.

Severn Trent's forecast multiple of 15.5 times forecast 2011 earnings, before exceptional items, is actually looking rather expensive, but the 5% prospective yield is rock solid. Maybe no longer a buy, these shares should be seen as a core part of anyone's portfolio. Hold says the Independent.

Spread bet group IG continues to grow and the markets are likely to remain volatile for some time. The stock is on a multiple of 14 times forecast earnings for 2011, while the prospective yield stands at a chunky 4.7% for 2011 and 5.1%for 2012. Keep buying says the Independent.

William Hill's second half will initially benefit from a bounce from last year's dismal start to the English Premiership football season. But the pressures on trading remain and with the shares, down 4.3p yesterday at 174.6p, trading on almost ten times full-year earnings, the immediate upside looks limited says the Times.

Tax increases and weak consumer confidence will continue to drag on pub owner Enterprise Inns and the fourth quarter will probably see a sales decline year-on-year. The high interest payments on its debt mean that the shares trade on less than five times this year's profits. But they don't look to be going anywhere for now says the Times.

Given the improvement in current trading, falling debts and shares Enterprise now looks cheap. The worst is more or less over. Trading on just 3.6 times 2011 forecast earnings Enterprise is worth a punt for the brave investor. A speculative buy says the Independent.

Ten years after the technology bubble burst, there aren't many internet start-ups from that era around. One of the few that have survived and prospered is domain name management company Group NBT. Founded in 1995, the group provides domain names and internet-related services to major corporations. The shares are trading on a June 2011 earnings multiple of 10.9 times, falling to 9.8 in 2012. However, stripping out the cash the group is thought to have in the bank right now, this brings the earnings multiple down to nearer nine times earnings, which looks good value. Buy says the Telegraph.


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