Mid-week share tips

By This Is Money
Updated: 08:02 EDT, 18 May 2007

Each day, This is Money rounds up share recommendations from daily newspapers and weekly magazines. You can also see the Midas share tips archive at Midas.

Friday

Investors Chronicle

WS Atkins has big problems with its 20% ownership of London Underground firm Metronet with criticism from management and commuters alike. The company may need to inject more cash and its reputation is at stake. Bull points include strong trading in its core businesses and growth opporttunities in the Middle East. But with a price-to-earnings ratio of 19 for 2007/08, IC says the risks are not in the price.
Verdict: Sell

Hedge fund manager RAB Capital has seen impressive growth of funds under management and the performance of those funds is good. The downside is the firm's reliance on performance-fee income and that it's funds are exposed to a slowdown in the natural resources sector. But stellar growth and the prospect of a decent dividend means the shares are trading at to deep a discount.
Verdict: Buy

Zambezi Resources has a strong joint-venture partner in Switzerland-based commodities giant Glencore and has plenty of exploration properties in Zambia, mainly copper, gold and uranium. The shares may be difficult to trade and there are political risks but commodity prices are strong and there's a good corporate strategy in place.
Verdict: Buy

Thursday

Shares magazine

Rig manufacturer and refurbisher Lamprell owns two boat yards in the United Arab Emirates where it works on oil rigs. The management has a record of over-delivering on promises, with brtokers suggesting 20%-plus earnings upgrades thanks to big new contracts.
Verdict: Buy

Eleco makes and supplies building systems and has seen shares have a quiet time this year, but that makes them seem cheap compared to growth prospects and the company is a takeover targety if progress isn't maintained.
Verdict: Buy

The Times

FirstGroup, saw a 22% jump in revenues thanks to winning the FirstCapitalConnect commuter franchise and extending its First Great Western business. It is bidding for three further franchises and has said it will increase its dividend by 10% until 2010. The group will still barely return 3% however.
Verdict: Hold

Wednesday

The Times
Builders merchant Travis Perkin's plans to open up to 80 stores this year, twice as many as 2006, and could nearly double its current 1,047 sites. That potential, along with strong cashflow and a rating of 14.3 times 2007 forecasts gives it a strong future.
Verdict: Buy

The Independent
Paddy Power shares have performed well over the past year as punters flock to wager on sporting events. It is the only quoted bookmaker to have signed up with both Turf and current broadcaster SIS. The legalisation of casinos in t Ireland, and a strong online business matched with its sharp and good humoured marketing and management make it a good punt.
Verdict: Hold and buy at any signs of weakness.

Enodis, the catering equipment group, saw a 10% jump in first-half pre-tax profit to £26.8m, despite the weak dollar and manufacturing materials inflation. This shows how well the business is performing.
Verdict: Buy

Restaurant group Carluccio's is a strong brand with good potential, plus private equity has shown plenty of interest in restaurant assets.The arrival of new sites is not happening as quickly as the City wants and investors should question if he stock still deserves to trade at a premium to rivals.
Verdict: Hold

Tuesday

The Independent

Southern Cross Healthcare is the largest provider of residential care home services for the elderly and the physically disabled in the country, a booming market. Yesterday's news of two small acquisitions means the group now provides more than 33,000 beds in 652 homes. That's only 7% of a fragmented market, leaving room for growth. The shares have been among the top performers since coming to the market last July. Although they are not cheap, Southern Cross should remain at the forefront of consolidation in the market.

Inmarsat remains confident that it can match market expectations for growth this year. The company's valuation is in the stratosphere, but demand for satellite services should continue to rocket as more devices come on to the market. With the European Alphasat project also set to be awarded to either Inmarsat or Eurelsat shortly, the shares are worth a punt.
Verdict: Buy

The sexual health specialist Futura Medical tanked yesterday after the drug giant GlaxoSmithKline dropped plans to develop its anti-impotence gel and Futura lost a third of its value. Glaxo has pulled out due to changing priorities, but the market for life improvement drugs is vast, and the gel has great potential. Most of the short-term disappointment is now in the price, although the stock remains very high risk.
Verdict: Hold