Date: Tuesday 24 Jun 2008
LONDON (ShareCast) - Pump and valve maker Weir yesterday issued an upbeat trading statement saying that full-year numbers will be "substantially ahead of 2007 and at the upper end of current market estimates".
Profits are expected to come in at about £163m. But Weir shares look expensive and buyers may prefer to look elsewhere for exposure to the sector. Hold says the Independent.
The Times adds that the problem is that, at 941½p, or 16 times next year’s earnings — against its sector’s 11 times — Weir’s attractions are recognised. Even so, that is a fair price for a company whose earnings are forecast to rise 37% this year and at least 14% next. Hold on.
Weir is still a good solid company, and should benefit from the continued demand for oil. But with the shares trading on 16 times next year's earnings, compared with the sector's 11 times, the gap is starting to look a little too wide. Now is the time to switch from buying and just hold on agrees the Telegraph.
Since an upbeat statement in April, the share price of ship broker ACM Shipping has soared, leaving yesterday's closing price at a year high. Hold says the Independent, but investors should understand that future returns may not be great as the past few months.
ACM’s order book for long-term tanker hire sits at record levels, adds the Times, but ACM is capitalised at more than 11 times current-year earnings, a premium to Clarkson and Braemar. Having rallied 30% in two months, there will be a better time to buy.
Film studio Pinewood Shepperton’s shares sit at a discount to most property-based valuations of its worth — an attraction that has drawn Peel Holdings as a 20% shareholder. However, with weak sentiment on media and property stocks, Pinewood, at 25 times earnings, is up with events. Pass says the Times.
As the only "pure play" ancillary power generator, Aggreko believes it is well placed to do very well over the next few years and even if the group trades at a premium to the sector, it is still worth backing to the hilt. Investors should look for evidence of more potential in the share price. Hold says the Independent.
Aggreko shares are trading on 18 times forecast earnings, but brokers are still bullish about the group, forecasting further upgrades in the next 12 months. Hold says the Telegraph.
The writing has been on the wall for sofa maker ScS since the start of its capital-raising exercise. Remaining shareholders in ScS will be lucky to salvage anything more than the £1 that Merchant Equity Partners paid for MFI says the FT.
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