The Week in Review: Paddy Power a good bet to beat the odds

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The Independent Online

When bookies get stuffed by punters, it is usually a good time to buy the shares because investors tend to forget that this happens from time to time and mark down the price. Recently, however, the results have been very much in Paddy Power's favour. Still, there is more to it than a run of bookie-friendly results. The decision to buy Turf TV offers a marketing advantage, and it plans to double UK outlets in three years. A rating of 18 times next year's earnings is demanding, but the company has lived up to a lofty valuation in the past. Buy.


Since the start of the market correction, shares in Kazakhmys, the copper producer, have fallen almost 30 per cent. The stock is approaching bargain-basement value – it trades on less than eight times forecast 2008 earnings. The bull market in metals may slow down, but low-cost mass producers of quality metals should prove an excellent long-term addition to any portfolio. Buy.


Playtech, a provider of online gambling software, emerged relatively unscathed from the US anti-gambling legislation, but it has not been immune. First-half profits fell slightly, affected by licence withdrawals from the US and recruitment costs. Looking forward, Playtech expects to generate new licensees in Europe and Asia. Online gambling outside the US still has excellent growth prospects. For those with a healthy appetite for risk, the stock looks well worth a punt.


Regus provides fully staffed and operational temporary offices and facilities. It has grown into a global operator, and is devoting more attention to emerging markets. The shares trade on an undemanding 14.9 times forecast 2008 earnings and, provided the US economy does not go into freefall, there should be plenty of upside left in the stock.


Lavendon rents out the sort of platforms you see workers maintaining cables on, and demand is going through the roof. The stock is not cheap, trading on 16 times 2008 earnings forecasts, but there is a good chance of more upgrades to forecasts. Lavendon should provide a very solid platform for growth.


The UK technology group SDL has an impressive array of customers, including Microsoft and Sony. It is more than just a software group; SDL employs an army of freelance translators and provides a fully integrated translation service through 50 offices in 30 countries. The outlook for the second half is mixed, but the shares still look decent value on 22.1 times forecast 2008 full-year earnings. Buy.


Facilities manager Interserve is worth inspection. The trend to outsourcing should continue to throw up plenty of new contracts. In the first half, the company won deals with some big names, including Abbey. The potential market is vast. If you want good value with strong, sustainable growth prospects, Interserve ticks all the right boxes. Buy.


Shares in finance groups tend to follow the market, but Shore Capital's have fallen more than a quarter since March, with nothing in the way of bad news. It is now the second-largest market-maker in AIM securities, and is taking more institutional business in larger-caps. For investors with risk appetites, the stock looks decent value. Buy.


As the UK housing market continues to struggle, advice to invest in estate agent Humberts could seem counterintuitive. But the fears tend to focus on sub-£300,000 housing; Humberts has less than one-third of its business in that range. The shares aren't expensive and Humberts has enjoyed consistent growth. Buy.


AMEC sold the last of its construction business in July and is now a focused project management and services group. Although first-half profits soared by 127 per cent, AMEC still has much to do if it is to justify the current market rating. The stock has more than doubled in value over the last 12 months and now trades at 19 times forecast 2008 earnings. Hold.


The £500m float of Eaga in June passed under most investors' radars. Eaga identifies low income people and then funds ways to make their homes more energy efficient. The shares are not cheap, trading on approximately 20 times forecast 2009 earnings. But its debut numbers were very encouraging. Eaga has 17 years of growth behind it and its future looks bright. Buy.


Shares in Sports Direct have tanked since floating back in March and investors have endured a first six months that have been little short of farcical. For the insanely brave it might be worth picking up some Sports Direct shares, but for everyone else this is not a stock worth backing. Sell.

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