Thursday tips round-up: Petrofac, Mouchel, Pennon

16th Jun 2011 07:03

Petrofac shares have experienced pretty much straight-line growth over the past year and had got to a stage, with a price-earnings multiple in the high teens, which was becoming hard to justify. The company has said that by 2015 it will double the basic profits earned in 2010. The shares look high enough for now but, for those looking further afield, it is an interesting play on the continuing strength of oil, says the Times.The near 13% decline in Mouchel's share price last night appears to have had its roots in the outlook painted by the engineering consulting and services group in its interim management statement. The ride will no doubt be rocky. But Mouchel appears to have the skills to emerge stronger. The market's reaction offers a good opportunity to buy into a company that we expect to regain its composure once the short-term pressures have passed. Buy, says the Independent.Pennon is the parent of South West Water, which supplies water and sewage services in Devon and Cornwall, and Viridor, which manages waste and recycling services and burns rubbish to generate energy. The company combines the steady and predictable income stream from South West Water, the most efficient water business in the UK, with the high-earnings growth of Viridor, which has made a series of acquisitions over recent years. Buy, says the Scotsman.One of the more startling statistics being bounced around the recent analysts' and investors' trip to Rio Tinto's mines in Pilbara, Western Australia, is that the human race will consume as much metals and minerals over the next 30 years as it has over the past 10,000. It illustrates why Rio is accelerating the production of iron ore from Pilbara significantly, and why the project was the venue for this annual visit. On some metrics shares in BHP Billiton, which is also at Pilbara, were pulling away from Rio and there seems no reason why this gap should not narrow. A strong hold, according to the Times.Fashion brand Ted Baker's launch in China through a store in Beijing in the second half will be significant. This is not only because the country - where the group initially plans to open about half a dozen shops over the coming years - promises huge sales in highly populous cities such as Beijing and Shanghai, but also because Ted Baker will be operating its own stores, as opposed to using franchise partners. That said, our concern with Ted Baker is that its shares now trade on a forward earnings multiple of 18.1, which makes us cautious for now, though we would buy if they cool down. Hold, says the Independent.RGPlease 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.