Tuesday tips round-up: Pearson, Pace, Dana

The good news for its shareholders is that Pearson tends to generate the majority of its profits in the second half, even though yesterday it was striking a cautionary note, given the uncertainty in the market. While Pearson will face tougher comparatives, the management believe they are in a good position to grow in the medium term, given the growth prospects in core markets. Pearson, on a forecast multiple of 14 times full-year earnings, trades in line with its peers. It deserves to be on a premium, so buy says the Independent. Pearson shares have traditionally been seen as a useful defensive stock with a decent yield and a spread of businesses tolerably resistant to economic downturn. Dame Marjorie was being cautious in her outlook statement, given how much income comes in the second half. The shares are on a chunky 14½ times' earnings after yesterday's rises and yield somewhere short of 4 per cent. Up with events, says the Times. National Grid prides itself on its cautious approach and reliability. Yesterday's trading statement confirmed this image, with a positive outlook and results in line with expectations. There were forecasts of a "substantial improvement" from the company's gas distribution business, which contributes more than a fifth of operating profits, after a poor showing last year. National Grid looks attractive. On just 8.6 times next year's estimated earnings, it's cheap, too, so buy says the Independent. Digital set-top box maker Pace increased its dividend by 45% to 0.725p per share. It also has a strong balance sheet, up £20m from the beginning of the year at £94.1m. Separately, Pace said yesterday it had acquired the wireless router company Wire, which will take it into the telecoms market. Trading on an undemanding 9.5 times estimated 2010 earnings, it's an obvious buy says the Independent. Pace's shares still trade at a lowly 7.7 times' RBS projected earnings for 2011, a legacy of market fears that its products were becoming increasingly commoditised. Pace should be given the benefit of the doubt; those with an appetite for a high-tech gamble should regard the shares as a buy, says the Times. Dana Petroleum shares are just below £17 again, compared with the £18 offer from Korea National Oil Corporation. Dana's management are entitled to take a bullish view but, with no certainty of a Korean offer, if you were in at £10 it might be time to take a few profits says the Times. 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.