Weekend tips round-up: Shanks, Tate & Lyle, Rentokil

Waste disposal space is running out and the continued use of landfill is impractical - and it is getting more costly. Landfill taxes will increase to £56 per tonne in 2011, £64 in 2012 and £72 in 2013. One company that will benefit from the new waste disposal regime is Shanks.

Although Shanks' markets are currently depressed, its future is underpinned by strong regulatory and legislative drivers. Trading on a March 2010 earnings multiple of 11.9 and yielding 3.5%, the stance is buy, says the Sunday Telegraph.

Tate & Lyle beat consensus expectations in its first half results - the first for new chief executive Javed Ahmed. The shares now yield 5% and trade on a March 2010 earnings multiple of 12.3 times, falling to 11 in 2011. Until the new chief executive lays out his new strategy, which could potentially include an exit from sugar to focus on ingredients and sweeteners, the stance on the shares remains hold, says the Sunday Telegraph.

Tate & Lyle shares are trading on a prospective price/earnings ratio of 12.5 times. Those who bought near the trough will be feeling understandably tempted to take profits given the jitters about the broader market rally adds the FT.

Turning round a business with problems as bad as Rentokil's, especially during a protracted downturn, is not easy. But now the management also have to justify a dividend-less stock that has risen 139% so far this year. That has left the shares trading on 23.6 times prospective earnings - a lofty premium to the support service sector, which leaves little room for any slip-ups. Investors will have to wait until the group's full-year results to hear details of the "growth agenda", but bears may fret that the share price rally has already anticipated any further improvements, the FT suggests.


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.