Friday tips round-up: AMEC, BTG, Heritage Oil

5th Apr 2013 07:37

The gyrations in shares of international engineering services group AMEC are a good example of just how nervous financial markets are. In February they plunged by 6 per cent after guiding towards revenue growth in the low to mid-single-digit range. Yet yesterday they rose against the backdrop of a falling market after professional investors were able to confirm that everything is on track. That shows how confident professional investors are in the Footsie's recent rally. In fact, the company is set to meet its target of 100p in earnings per share by 2015 a year early. The shares now sell on a little more than 12 times this year's earnings. "Fair value, if little to get excited about," The Times's Tempus column says. Trading at 30 times' this year's sales some might be put off by mid-cap pharmaceuticals outfit BTG. Yet such multiples are not unreasonable for companies of this type. On Thursday the firm ended higher after unveiling its third upgrade to its yearly revenue forecasts, to £230m. Nevertheless, "it is none too clear where the catalysts for further share price movement will come from," Tempus writes. Even so, the company is in a good position, with £150m of cash on hand with which to fund further investments as well as the purchase of other treatments. More important however is the company's good track record in carrying out such transactions. Then there are the favourable prospects for its main product Varisolve. Hence, for now Tempus recommends foregoing shorting the stock.Shares of oil producer Heritage Oil dropped yesterday on the back of news-flow pertaining to its court case versus the Uganda Revenue Authority. However, while an interesting distraction nothing related to that supports a re-rating of the stock. The main merit of the company, and on which investors ought to be focusing, are the prospects for the huge OML 30 oil license in Nigeria. Unfortunately, at a Capital Markets Day in late January Heritage gave less detail than some had hoped for on how it will ramp up production from the current levels of 35,000 barrels a day of crude to nearer 300,000 by 2020. However, The Telegraph's Questor team expects it to provide an update on progress when it releases its full-year results at the end of this month. Questor therefore reiterates hold.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.AB