Tips from the press
The Times' Tempus column this morning looks at temporary power and temperature control solutions group
The paper does highlight that while debt, after the completion of a Brazilian acquisition, will be around £515m, "the huge sums of cash the company pulls in means this level of debt is well within acceptable levels". The column suggests that the company may at some stage return capital to shareholders like it did last year.
While the shares look expensive at 19 times next year's earnings, Tempus says that "it would be a brave man who was prepared to bet against its winning run continuing." (Last IC rating: Hold, 28 Mar)
The Questor column in the Telegraph believes that it's time for the bulls to act on FTSE 100 engineer
Just 32 per cent of Weir's total revenues last year came from the oil and gas markets and not all of this was US shale. Meanwhile, with rig data from Baker Hughes last week showing an increase in the number of US companies drilling for gas recently, Questor is not in the bear camp. After recent underperformance, the paper recommends to buy (Last IC rating: Buy, 29 Feb).
The Times' Tempus column also casts its eye over electrical, digital and optical connections provider
"Yesterday's trading statement for the year to April 1st makes it clear that this was a temporary slowdown in growth," Tempus says. The column adds that while full-year revenues grew at just six per cent, compared with the 38 per cent growth achieved the year before, they should return to low double-digit growth in the current year. With the shares trading at 11 times last year's earnings, the Times reckons that this "looks like a reasonable entry point for what is a long-term growth story, though it may take a while for the market to wake up to it." (Last IC rating: Good value, 7 Nov)
Business press headlines:
"China's economy grew 8.1 per cent in the first quarter from a year earlier, its slowest pace in nearly three years. With Europe struggling and the US recovery appearing to ebb, signs of strength from China, the world's second-largest economy, could still help allay fears of a global slowdown. Despite the lower-than-expected growth figure, China's economy picked up speed in March and economists said they expect higher growth in the months ahead," according to the Financial Times.
"Google reported a 61 per cent increase in its net income for the first three months of the year and announced plans to split its stock two-for-one to preserve its leadership's control over the company in the long term. The online search leader said on Thursday night that it wants to issue a new class of stock to shareholders, but the new shares won't have any voting power. Under the plan, all current stockholders would get one share of the new Class C stock for each share they now own. This effectively splits Google's stock price in half," writes the Telegraph.
"Government hopes of an export-led recovery were dented on Thursday as the weakest trade figures for almost six months coincided with a warning from the World Trade Organisation (WTO) that the turmoil in the Eurozone would act as a major drag on international commerce during 2012. Official data showed the sovereign debt crisis in the weaker countries of the monetary union already having an impact on UK firms, with exports to Italy, Spain, Portugal and Greece all showing steep falls over the past year," according to the Guardian.
"Around 1,200 staff at bmi will lose their jobs after the takeover by British Airways, the airline has announced. BA has started consulting unions on how to integrate the remaining 1,500 jobs at Heathrow. It insists that without its £172m acquisition of the loss-making airline from Lufthansa by BA's parent company IAG, all of the 2,700 jobs would have been lost," according to the Guardian.
Read today's Market Overview - a round-up of today's company announcements.
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