Date: Tuesday 04 Mar 2014
LONDON (ShareCast) - Intertek Group, the provider of testing services, on Monday gave investors reasons for cheer. It still sees considerable opportunities in China, one of the long-term drivers for the business. Margins should also improve this year. Thus, cuts in capital expenditures by big oil firms are now being matched by higher spending from state oil plays.
Nonetheless, some observers have raised doubts about the company´s ability to continue growing through acquisitions. The company´s answer? It announced the purchase of UAE-based testing firm from Lamprell and its chief thinks the market continues to be “highly fragmented”. Even so, and despite the good outlook for China, in the short-term conditions are likely to remain difficult. Therefore, on 20 times´ earnings the shares look “high enough”, The Times´ Tempus says.
Despite reporting a 70% increase in pre-tax profits investors sent shares of construction group Keller lower.
The company warned of the impact which cold weather in North America and weakening foreign currencies would have on its results. The wider market jitters also played a hand in the share price drop. Not only that, the firm believes profit margins might improve as the recovery in US construction continues apace. However, the situation in Australia and Europe remains tough, while the picture is mixed in Asia.
Furthermore, margins may not pick back up as quickly as expected as competition rises. The shares are trading at 14 times' next year's earnings, above their long-run average of 10. Solid foundations for a recovery, but no better than a hold, says The Telegraph´s Questor team.
Aerospace components manufacturer Senior surprised investors with its results. Unlike BAE Systems or Rolls Royce its defence operations are expected to hold up, thanks to increased work on Airbus´s A400M medium-sized military transport and on the P-8 maritime surveillance aircraft. Furthermore, the company sees overall margins holding up at 15% despite pressure on pricing from Boeing and Airbus.
Even better, Senior will receive considerably more work from the new Airbus 320neo and Boeing 737MAX programmes than from previous ones. Hence management's confidence and the company´s increased dividend. At about 14 times' earnings the shares are a “firm hold”, says The Times´s Tempus.
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