Friday tips round-up: Severfield-Rowen, 3i, Misys
Analysts slashed forecasts by £6m or 12% to £50m for steel supplier Severfield-Rowen after its cautious comments yesterday. Somehow the market translated the slowdown into a 42% assault on the shares, although they later recovered 5%of the loss.
The company is acknowledged as a leader in the world structural steel construction industry, but the shares will probably remain friendless until evidence emerges of an improvement in trading conditions. Hold says the Independent.
The amount of electricity generated by renewable technologies such as wind, wave and tidal power in the UK will have to increase from 5 to 40% over the next 12 years, according to the European Commission. Wind power is here to stay, and Clipper Windpower is in a powerful position to take advantage of the need for renewable energy. As it ramps up production to meet demand, it needs to ensure that there are no more technical glitches. Hold says the Independent.
Instead of ducking for cover in the current volatility, investment group 3i is excellently placed to take advantage of depressed and nervous markets. It has the muscle to exploit its position and impose realistic valuations on companies needing cash to expand. Tighter market conditions might stunt growth this year, but 3i remains a class act for the long term. Buy says the Independent.
That Lonmin should report a below-forecast 19% drop in first-quarter output on the day that platinum hit a record high illustrates just how badly the world's third-largest producer of the precious metal has positioned itself in a market that is booming. It remains a possible takeover target - the last confirmed approach was two years ago - but predators appear thin on the ground. So, although spot prices remain in its favour, Lonmin, at £30.29, or 17 times this year's earnings, is best avoided says the Times.
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However much financial software group Misys is running to plan, it is hard not to feel that banking's woes will bite. With Misys also managing the rollout of BankFusion, a core new product, and competition from Tememos and i-flex fierce, the shares, at 12 times 2008 earnings, still have scope to disappoint. Sell at 173p says the Times.
Cable & Wireless's management team, through a private-equity style remuneration scheme, are heavily incentivised to succeed. On their performance to date, at 159p, it is worth holding on says the Times.
Trading on 24 times forecast earnings, dropping to 16.7 times for 2009, and yielding a prospective 4.5%, there's no reason to jump ship at this point, adds the Telegraph. Hold.
In a trading statement yesterday, property group Helical Bar said it is seeing value in the investment market for the first time since 2005 and was preparing to go on a buying spree. At this stage in the cycle the raw figures don't tell the whole story. What you are buying into with Helical Bar is the style of the chief executive, Slade, and just as importantly but less well known, the experience of his well-regarded deputy Mike Brown. Buy says the Telegraph.
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