Wednesday tips round-up: AMEC, ITE Group, Anite

5th Dec 2012 07:00

Engineering and project management group AMEC's win of a 327m pound contract relating to the Al Zour oil refinery in Kuwait seems to show that the company's strategy of focusing on higher-margin infrastructure and construction projects in the mining, power generation and the oil and gas sectors is working. A recovery in the general market backdrop and proof of delivery on major projects such as Al Zour is needed before a rerating takes place. Nevertheless, the shares are trading on a 2012 earnings multiple of 13.7 times, falling to 11.6. The yield is a prospective 3.2 per cent rising to 3.6 per cent. The shares were last tipped as a buy in February and they are now 5 per cent lower, Questor keeps its buy.On Wednesday morning the Times's Tempus column comments on the announced acquisition by independent exhibition organiser ITE of a 28% stake in the Indian firm ABEC, the biggest such outfit in that country. The Indian deal means that ITE now has the three biggest construction events in fast-growing Turkey, Russia and India. The way the industry works is that exhibitors from the West in one can be cross-sold space in the others. As well, it may have alleviated some investors' fears that the pace of expansion was slowing down. "The long-term growth story is still there," Tempus concludes. When he last looked at Anite, back in early July, Tempus suggested taking some profits on shares that had risen by 40 per cent since he tipped them at the start of the year. The shares have, indeed, done little since, but halfway figures from the company, which makes most of its money from providing software to test telecoms networks and handsets, should prompt a reappraisal he believes. Analysts were shifting up their forecasts for the year and the shares are on about 17 times' earnings. Those new forecasts look too cautious to the columnist; "the shares should have further to go, although this might have to wait for the new year," he writes. 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