Friday tips round-up: Aggreko, Weir, Volex

13th Apr 2012 06:58

The Times' Tempus column this morning looks at temporary power and temperature control solutions group Aggreko, saying that the 'power surge has no end in sight'. Tempus says that the exponential growth over the past five year has continued into the first quarter of 2012, with the group reporting yesterday that both divisions delivered underlying revenues increases of over 20 per cent.The paper does highlight that while debt, after the completion of a Brazilian acquisition, will be around £515m, "the huge sums of cash the company pulls in means this level of debt is well within acceptable levels". The column suggests that the company may at some stage return capital to shareholders like it did last year. While the shares look expensive at 19 times next year's earnings, Tempus says that "it would be a brave man who was prepared to bet against its winning run continuing."The Questor column in the Telegraph believes that it's time for the bulls to act on FTSE 100 engineer Weir, saying that the recent falls in the stock are overdone. "A large number of short positions have been weighing on the share price of the pump specialist. This is because of US gas prices - and investor confusion that shale gas is all of the company's business," the column writes.Just 32% of Weir's total revenues last year came from the oil and gas markets and not all of this was US shale. Meanwhile, with rig data from Baker Hughes last week showing an increase in the number of US companies drilling for gas recently, Questor is not in the bear camp. After recent underperformance, the paper recommends to buy.The Tempus column also casts its eye over electrical, digital and optical connections provider Volex. The stock was sold off with the rest of the industrials in the autumn of last year but failed to rebound as much as the market did, the paper says."Yesterday's trading statement for the year to April 1st makes it clear that this was a temporary slowdown in growth," Tempus says. The column adds that while full-year revenues grew at just six per cent, compared with the 38% growth achieved the year before, they should return to low double-digit growth in the current year. With the shares trading at 11 times last year's earnings, the Times reckons that this "looks like a reasonable entry point for what is a long-term growth story, though it may take a while for the market to wake up to it."Please note: Digital Look provides a round-up of news, tips and information that is impacting share prices and the market. Digital Look cannot take any responsibility for information provided by third parties. This is for your general information only as not intended to be relied upon by users in making an investment decision or any other decision. Please obtain a copy of the relevant publication and carry out your own research before considering acting on any of this information.BC