Press tips: Sirius Minerals, BHP Billiton, Morgan Crucible

By Sharecast, 16 February 2012

Following a very quiet day yesterday for company news, Tempus in the Times compares the likes of Sirius Minerals (Last IC rating: Fairly priced, 15 Nov), the mining company which may have discovered a world class potash resource in North Yorkshire, and the big players like BHP Billiton (Last IC rating: Hold, 8 Feb).

The point David Robertson makes is that you are usually better off buying the big players rather than the one off chancers because what matters is the margin on production. When times are good (like now) the big players will tend to be able to produce commodities very cheaply. When times are tough, and prices go down, those same big players are the ones likely to survive.

The column also touches on the high tech carbon and ceramics manufacturer Morgan Crucible (Last IC rating: Buy, 15 Feb), highlighting a very strong trading update yesterday, with a dividend increase of 20 per cent but Tempus does not provide a recommendation.

In the Telegraph, Questor is not so shy. The column takes a look through Morgan Crucible's results: a pre-tax profit rise of 64.5 per cent for 2011 with sales growing at 8.2 per cent, and again, that rather tasty dividend increase.

The strategy of developing 'differentiated' products to then sell at high margins, combined with a focus on emerging markets is clearly paying off for the firm. It is also a genuine British manufacturing success story to bring a tear to the eye of people who still believe there is a future in making things in this country. The stock rocketed yesterday but at 11 times earnings, Questor still says buy.

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