News

The tobacco stocks British American Tobacco and Imperial Tobacco are nailed-on buys in the face of the expected recession.

Both are doing well selling cigarettes in the emerging markets, particularly the Middle East, despite a falling number of smokers in the West. According to research from Evolution, BAT and Imperial are likely to increase payments by 51 and 53% respectively over the next three years. Buy says the Independent.

Laird's shares jumped yesterday after the group issued a trading statement saying that full-year targets would be hit, even though demand for its electronic and technology products has slowed. Price earnings ratios of 4.2 times for 2008 and 4.6 times for 2009 may reflect what is likely to be a tough 12 months next year, but there are better options for investors, at least for the time being. Sell says the Independent.

Volumes will fall, but the underlying trend that has fuelled Laird's growth - a shift to smaller, wireless devices - has not gone away. With about £100m of debt, Laird is also less geared than many of its peers. On five times next year's earnings, and yielding a prospective 7%, hold on says the Times.

Printing is a cyclical market and St Ives is at the top of its game and has relatively strong margins. One problem has been an oversupply of print capacity but current conditions could force a shake-out that could benefit St Ives. RBS's full-year forecast for 2009 puts the shares on a forward price/earnings ratio of 6.1, representing a chunky discount to the support services sector say the FT.

At six times earnings, and yielding 12% on the final dividend alone - to be paid on December 5 to investors on the register on November 7 - printer St Ives shares are not without attractions. However, falling profit forecasts, rising net debt and a sizeable pension deficit counsel continued caution. Avoid says the Times.

Even if Debenhams has bottomed out, it is hard to see what could drive it materially higher in the short term. It would take some courage to invest in any retail stock in the current environment, and even more so to choose a retailer with such high operational and financial gearing as Debenhams. One for the brave only says the Telegraph.

Filtrona is preparing for a "more difficult trading environment" in some of its markets as the global recession bites and inevitably hurts demand, but the company offers a diverse range of products with defensive qualities and its biggest division, its protection and finishing products, performed well during the past quarter. On a valuation of 7.5 times 2009 earnings, now could prove a smart time to invest. Buy says the Telegraph.

Investment manager Record said yesterday that the quarter to the end of September had been "exceptionally challenging," due to clients being risk-adverse and the group struggling to find counterparties. Investors should avoid, at least until there is a tangible return to economic health. Sell says the Independent.

Yesterday's announcement for Tullow Oil in Uganda does nothing to diminish the claim that Lake Albert is a billion-barrel prospect. Even so, with with oil prices volatile ahead of Friday's Opec meeting and shares in Tullow inevitably up yesterday, there will be better times to buy says the Times.
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