Wednesday tips round-up: Umeco and Bovis

9th Nov 2011 06:44

The Times's Tempus column assesses the prospects for Umeco, which provides services to the aerospace and defence industries but also has a rather interesting division making composite materials used in, among other things, Formula One cars.Tempus believes this business will be spun off in the near future which, of course, raises the question of whether there is value in Umeco.Given a transaction is on the horizon and a management statement yesterday revealed rising operating profits, an improved dividend and a total value of less than 11 times 2012 predicted earnings, Tempus thinks Umeco is a buy.The Telegraph's Questor column looks at Bovis, the house builder. While there has been much doom and gloom around property prices Bovis has been buying plots of land cheaply since 2008. As Questor points out this will lead to higher margins when (if!) there is a full blown recovery.The firm also has a bias toward the more robust South of England which should further fortify earnings. Currently shares trade at 28 times earnings but this is expected to drop to 19x next year. Most people will argue that is very high but Questor assures us that with high growth potential, Bovis is a buy.BS