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Sunday's tips round-up: Miners, Uniq, Thorntons

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Date: Sunday 12 Oct 2008

LONDON (ShareCast) - The diversified miners such as Xstrata, BHP Billiton and Rio Tinto, should continue to perform. With strong cash flows and access to debt, they are best placed to grasp the opportunities likely to emerge in the future when others have had to shut down capacity or shelve development projects that may come up for sale, says the Sunday Telegraph.

Uniq remains comfortably within its banking covenants, but there is little reason to hold any confidence at all in the company’s future. Cost-cutting can only go so far, while price recovery seems some way off. As one broker put it, Uniq has been hit by “a veritable catalogue of woes”. It’s hard to disagree. Sell, says the Sunday Telegraph.

Questor is not prepared to turn buyer just yet in Thorntons. Retail conditions are unlikely to improve and for all its attempts to grow the “year-round” elements of its business – the first quarter contributes just a fifth of sales, with Christmas, Easter, Valentine’s and Mothers’ Day yet to come, says the Sunday Telegraph. It believes Thorntons is still fairly valued and growth investors should avoid the shares for now, it adds.

The Mail on Sunday says investors with large holdings in the banking sector should bear in mind that the worst time to sell is at or near the bottom of the market. They should grit their teeth and hang on until prices begin to look more healthy.

Investors looking for income, however, should turn their attentions elsewhere. HSBC remains a good buy on that front, but other stocks are offering even better yields.

Currently, BP yields 7.2% while Shell offers 6.2%. Both these stocks would seem to offer a haven in troubled times.

Vodafone maintains that there is plenty of potential in the West and in emerging markets and last week even offered £1.4bn to take control of South Africa's biggest mobile company. Vodafone shares are yielding 7.5%.

Aviva said last week it had hedged itself against further falls and maintained that its position was strong. Nonetheless, the yield is an impressive 8.8%, concludes the Mail on Sunday.

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