Thursday tips round-up: Experian, Meggitt

8th May 2014 07:31

Analysts can sometimes surprise with their uncanny ability to leave out well-known events from their forecasts for companies´ profits. Such is the case with Experian. The number crunchers at many brokers seem to have just woken up to the fact that the upcoming World Cup in Brazil may negatively impact business levels at Experian on the days when the home team is playing. Then there are the continuing changes in the US credit check market and the slowdown in the US mortgage market. The share price duly crumbled when the firm woke analysts up to those facts. Revenues, however, were higher in all four of the regions in which it operates for the year ended in March, even if the reported sales figure for Brazil took a hit from adverse currency movements. At almost 18 times this year´s earnings traders may just have been looking for an excuse to ´take profits´ as that is not a high figure historically, even if the yield is a mere 2.2%. Hence, that suggests "this is a good time to pick them up again," writes The Times´ Tempus. Engineering outfit Meggitt is seeing improved demand in the civil aviation market. That allowed the company to reassure markets that trading was in line with expectations. In parallel, the firm announced Chairman Sir Colin Terry´s intention to retire after a decade at the helm. Organic sales of equipment fitted to commercial jets continues to grow, offsetting a decline in military orders and a rising pound. As well, other programmes at Boeing and Airbus are expected to increase significantly over the coming year. The firm also unveiled a contract with Petronas to supply equipment for use on gas rigs off the Malaysian coast. Nonetheless, this was not a confident statement on trading for the year ahead, due to the anticipated currency headwinds. Yet shareholders will have been glad to know that no further problems had been discovered. That was critical as the company needs a strong second half to reach its full-year estimates. "The shares, trading on a price earnings ratio of 12.9 times´earnings, are one to watch if more orders are announced. Hold," says The Daily Telegraph´s Questor. 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