Wednesday tips round-up: Petrofac, BPI

28th Aug 2013 07:27

Shares of oil equipment manufacturer Petrofac are too cheap given the very positive expectations for its sales and earnings next year. Not only were its interim figures out yesterday better than expected, the company is expected to receive a significant boost as the In Salah gas project comes on-line, together with the Zakum project in Abu Dhabi. Furthermore, after having raised its stake it will soon be able to book the total figure for sales and orders at its Petrofac Emirates subsidiary. Even after yesterday's movement in the share price the 2013 earnings multiple is 10.4 times, falling to 8.3 times next year. Add in the interim dividend being nudged up 5 per cent to 22 per cent, paid on October 18th, and the shares remain a Buy, says The Daily Telegraph's Questor. The launch of new products and higher pricing allowed British Polythene Industries [BPI] to deliver a first-half a 16% increase in pre-tax profits, figures published yesterday showed. In fact, both volumes and prices rose in its mainland European market, despite the crisis. BPI shares have had an excellent run, adding 44% so far this year. However with prices for plastic wrapping products holding at these levels and resilient demand across Europe for the new range of products the rating is not looking stretched. At 10.2 times 2013 earnings, falling to 9.5 times next year, its stock is changing hands at a discount to peers in the packaging sector. The interim dividend is up 7% to 4.5p, and with a full-year dividend yielding 2.5% - something which brokers expect to grow by double digits over the next two years - BPI is one to watch. Having said that, "with the shares near record highs, it's a hold for now," The Daily Telegraph's Questor team adds. 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