LONDON (ShareCast) - Aggreko is a global provider of temporary power solutions in a world that is structurally short of power, writes The Telegraph´s Questor team this Sunday. That means that continuous investment in the amount of power available to hire is key to growth. However, while its net debt has risen by £63m to £428m as a result of investing ahead of the Olympics in the first quarter the amount of megawatt capacity on hire was 22% ahead in its international business. Furthermore, the company can easily invest out of its own cash flows and its balance sheet remains strong. As well, last week’s trading update showed a more positive outlook than Aggreko’s last statement. The international business also has a good bidding pipeline. Because of the upbeat start, consensus forecasts could rise. Every time one thinks the shares have reached a peak, they move higher, Questor points out. Indeed, they have soared by a staggering 385% since the start of 2009. The shares are highly rated, trading on a 2012 multiple of 21.2 times. However, the company is likely to see double-digit returns for some time as it operates in a global bull market. The shares are still a hold, but the firm will no doubt once again show Questor is overcautious.
Engineering consultancy and support services group WS Atkins has benefited from its toehold in the Middle East, while its UK operations appear to have stabilised. Last week, Atkins said it has "traded well" in the final quarter of the year so its full-year figures would be in line with expectations. At its UK operations, which account for about half of revenues, there was modest growth in its headcount in the second half of the year. This implies management has confidence that the business has turned a corner. Meanwhile, its North American consultancy, which generates about a quarter of revenues, has been sluggish, but margins are expected to have shown an improvement. Encouraging as well is the fact that the Middle East saw "strong market conditions". The company has focused on cash management and now has net cash of £120m, so the balance sheet is strong. The shares should be supported by the 4.1% yield, which rises to 4.3%. The current-year earnings multiple is just 8.4, falling to 8.1. First tipped at 727p on April 14 last year, the shares are essentially flat compared with a FTSE 100 down 5%. Questor says Buy.
Andor Technology, based in Belfast, was set up in 1989 after a group of PhD students at Queen’s University found the cameras they were using for their research were not quite good enough – so they developed their own. These were soon sought by other departments and then other universities. Andor has only two serious competitors worldwide. Fortunately, it tends to be better than both of them and over the past 15 years it has won a reputation for excellence. With just 330 employees, two-thirds of whom are in Belfast, the company has 10,000 customers in 55 countries. However, chief executive Conor Walsh unnerved some investors this month when he admitted that orders from America were lower in the six months to March 2012 than they had been a year earlier. Despite customers’ focus on quality, many are publicly funded and their budgets are under pressure. The situation has improved in recent weeks, however, and the group is powering ahead in Asia, particularly China and Japan, where demand is extremely strong. For The Financial Mail on Sunday´s Midas column, "Andor shares have fallen from 605p at the start of the year to 504 1⁄2p. At this price, they are good value. This small company serves a highly technical but growing market. Science is developing all the time and researchers need top quality equipment to do their work effectively. Andor is the best in the world at what it does. Buy."
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