News

Amid all the doom and gloom in the markets at the moment, up popped FirstGroup yesterday with a bit of good news. The £175m it planned to raise from shareholders to help finance its £1.8bn purchase of Laidlaw - the company that owns America's Greyhound buses, along with a fleet of 40,000 of those iconic bright yellow school buses - will not be needed.

In the meantime, trading across the group looks chipper, with the bus business showing healthy growth and improving margins, and the rail operations chugging along happily. If (as expected) extra savings are wrung from the US operations, the rating would fall to 12.5 times. On that basis it is worth tucking a few of these away. Buy says the Independent.

With First's UK and European businesses continuing to prosper and earnings forecast to grow 20 per cent this year and next, the shares, at 13.8 times 2009 earnings - the best year to take given deal-related complexities in 2008 - are still good value. Buy says the Times.

From AutoParts Azerbaijan to MiningWorld Mongolia, ITE Group has gone where other trade show organisers might fear to tread. It sits at 17.4 times 2008 earnings, but with £30m of cash giving it scope to continue buying back shares, pursue bolt-on deals and enter new markets, it is worth holding on says the Times.

UK Commercial Property Trust, a fund 75% owned by Resolution, notched up an unenviable first yesterday: its external valuers cut the price of its portfolio, making it the first London-listed vehicle to suffer such a fate since the real estate downturn began. Retail warehouses bore the brunt of the markdown. Most agents are still expecting property prices to fall about 10% over the coming months. That is reason to avoid says the Times.

Steady as she goes was the message from the waste management company Shanks yesterday. At 18 times full-year forecast earnings, yielding 2.8%, the shares are not cheap, although they were a lot higher in the summer. But the wind is still blowing in this company's direction and it looks like a good long-term bet. Hold say the Independent.

There is an increasing shortage of landfill sites and the waste management sector is forecast to grow by around 10% over the next decade. New rules coming into force later this month on treating waste before taking it to landfill sites should also help Biffa. For those patient enough to wait for a turnaround, Buy says the Telegraph.

Lloyd's underwriter Heritage has surged to new levels, with last week's better-than-expected interim results giving further impetus to the stock. The next chapter in Heritage's development is the merger of its two Lloyd's syndicates together, which will allow it to insure up to £325m of risks in 2008. The adverse impact of the weaker dollar will continue to weigh partly on sentiment but for now, it's a Hold.

Holidaybreak yesterday announced the £47.2m acquisition of NST, a provider of group travel to schools and colleges throughout the UK. Using an operation like NST takes a considerable portion of the grief away from harassed education professionals. The shares are not cheap, and there is a downside risk from a consumer slowdown. But the deal offers scope for the shares to be re-rated. 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.