Tuesday tips round-up: Costain, AMEC, James Fisher & Sons'

4th Jun 2013 07:42

Costain, the go-to infrastructure builder in the capital, has done well to tie its future to that of big customers, but so far it has failed in its stated goal of breaking out of low-margin construction. Likewise, it continues to be almost wholly focused on the UK - which, relative to other regions, is unlikely to return to the construction boom fast lane. Not only that, but it is hard to see where the transformational deal which its top executives want will come from. The shares are now trading at over ten times' this year's forecast profits, more than enough for a construction company. Even so, "if you are a holder of the stock, it seems reasonable to continue to be," says The Times's Tempus. Engineering services outfit AMEC has been seeing a slowdown in some of its main markets, hence the recent trend lower in its share price. However, a strong conventional oil and gas performance across the board and more modest growth in the clean energy and environment and infrastructure markets in the Americas are expected to offset reduced oil sands revenue and softening demand in the mining market. As well, the company now expects to hit its 2015 earnings per share target, of 100p, one year earlier. The Daily Telegraph's Questor maintains a hold rating on the shares, which should continue to find support from its cash generation and yield.Marine group James Fisher & Sons' has a winning strategy, focusing on niches where its services can command higher margin business. Thus, it provides everything from structural monitoring technology equipment to compressors for diving or ship-to-ship transfer services. Yesterday it announced another important contract win, to install monitoring devices on a new bridge over the Firth of Forth connecting England and Scotland. Trading on a 2013 earnings multiple of 16.1, falling to 14.7, the shares are up with events and a hold rating is maintained, The Daily Telegraph's Questor team says. 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