Thursday tips round-up: Weir Group, Imperial Innovations

16th Oct 2014 21:20

Having failed in its bid to purchase Finnish group Metso Weir Group purchased Trio, a far smaller outfit, marking its first bolt-on acquisition since the start of last year. Trio specialises in comminution, the process by which large rocks are crushed so as to allow miners to get more easily to the ores inside. The deal makes sense, as both companies serve the same end users and Trio has little presence outside of China and the US.That means Weir can take Trio's wares into other markets now, such as Australia or Latin America. The numbers stack up, the returns will exceed the cost of capital in the first full year. However, given the slow recovery in the mining sector, and the fact that big producers have cancelled projects, there is no reason to chase the shares, so 'hold' says The Times's Tempus.Those who invested in Imperial Innovations £150m cash-raising this past summer have nothing to complain about. Then again, few got a chance, after Neil Woodford took the lead in widening the share register via his new vehicle - from three large investors to four.That is a pity. The company is essentially an incubator for start-ups from four leading universities, which allows for the risk from its 95 businesses to be more spread out. Circassia, the allergy specialist that floated last year with a market cap of £581m, is a good example of its successes.Buy if you can, Tempus says.