LONDON (ShareCast) - The London-listed industrial engineering sector was the best performing sector of the day on Monday with Weir Group performing well after some upbeat comments from Bank of America (BofA).
Weir, a global engineering firm with nearly 200 manufacturing and service facilities around the world, was up 4.44% at 2,281p in afternoon trade after BofA highlighted more upside to its current share price.
The group operates three main divisions: Minerals, which provides slurry handling and mine dewatering equipment; Oil and Gas, which makes pumping and pressure-control products; and Power and Industrial, which manufactures valves, pumps and turbines.
BofA retained its ‘buy’ rating for the stock in a research report this morning but raised its target price from 2,300p to 2,500p following a visit to Weir’s SPM unit, which accounts for 23% of profits.
BofA said that despite a strong performance in 2013 so far (up 21% year to date), Weir is still trading at a discount to the sector with a price-to-earnings ratio of 14.3.
“The company remains well placed and given the measures being taken at SPM, we believe Weir can trade back to its 10-15% historical premium versus the sector – which is reflected in our higher 2,500p price objective.”
Meanwhile, Weir announced on Monday that Norges Bank, one of its largest shareholders, has raised its stake in the firm to over 3.0% after buying up shares.
The stock was also performing well after US conglomerate General Electric (GE) announced that it would be spending $3.3bn on buying industrial group Lufkin, which operates in similar sectors as Weir. Lufkin manufactures artificial lift technologies and industrial equipment for the oil and gas industry.
Other industrial engineers in London, including Corac, Avingtrans, Clean Air Power and Hayward Tyler Group, were also performing well this afternoon.
Top performing sectors so far today
Industrial Engineering 9,290.60 +1.04%
Media 5,295.10 +0.90%
Food & Drug Retailers 4,557.33 +0.76%
Food Producers & Processors 7,412.93 +0.76%
Electronic & Electrical Equipment 4,021.67 +0.75%
Bottom performing sectors so far today
Forestry & Paper 8,859.44 -1.73%
Banks 4,629.21 -0.93%
Industrial Transportation 2,644.63 -0.90%
Insurance (non-life) 1,692.73 -0.49%
Software & Computer Services 1,004.45 -0.44%
BC
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