News

Forget HBOS and Lloyds TSB. The FTSE 100 takeover that was always more immediately set to founder was Xstrata's proposed £5 billion bid for Lonmin. Xstrata has lost none of its drive to build a diversified miner - as proved yesterday by its move to pick up a further 14 per cent of Lonmin, taking its stake to the 25 per cent limit allowed by South African rules.

The problem for Lonmin investors is that, although Xstrata's blocking stake makes a second bid only a matter of timing, they risk tying up their cash to little effect in the short term. Hopes that a new chief executive will rectify Lonmin's operational problems and a low valuation (seven times earnings at £18.13) are enticing. However, the danger of a further deterioration in platinum prices instils greater caution. Avoid, says the Times.

Asos is the hottest retailer in a decidedly icy sector. Analysts expect much from the company, hence it trades on a multiple of 29 times earnings for the current year - far higher than high street retailers. Yesterday's trading statement, which showed an acceleration in already phenomenal sales growth, gives more ammunition to the bulls. There is little margin for error, especially in the face of the credit crunch. But given that Asos has no direct competitors its size, and internet shopping is forecast to boom, the stock looks set to get even hotter, writes the FT.

Waste is sexy - or at least it is if you are a shareholder in Shanks, the waste management, recycling and power generation group which operates in Britain and the Benelux countries. Its trading statement yesterday said its interim results would be better than some analysts expected. The group's shares rose by more than two per cent. Not too many stocks are as defensive as Shanks at present. Buy, says the Independent.

At 198p, Shanks trades at 13 times current-year earnings, its lowest multiple for years. A solid hold, says the Times.

The Telegraph adds that the waste sector has attracted great interest from private equity and there are few pure play operators around. Given that, the growth potential for the sector, and the strong management, a 12.7 times earnings multiple seems too low. Buy.

Media distribution group Dawson is the smallest of the three big players in the sector and, while it is undoubtedly doing well, there is the chance that it will suffer if investors seek a safer haven in a bigger rival. Hold for now, writes the Independent.

Ascribe has promised to backdate any payments if directors eventually take the group private. There is also likely to be a boost in the share price should a firm bid be confirmed. There are not many Aim companies that present a compelling investment case but punters who snap up Ascribe's shares might discover they have found one. Buy, says the Independent.
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.