Thursday tips round-up: BHP Billiton, Carillion, Spirax Sarco

23rd Aug 2012 07:04

Questor in the Telegraph goes in to bat, big time, for BHP Billiton. Yesterday the world's biggest mining firm raised eyebrows after reporting a 26 per cent decline in pre-tax profits and cancelling a huge copper and uranium project, known as the Olympic Dam. Questor believes any pessimism is overdone, with the company still hugely profitable (operating margin at 39%) and the general trend in global urbanisation likely to drive profits for the foreseeable future. Trading at just 9.5 time 2013 earnings and yielding 4%, BHP is a buy.In the Times, Tempus is sympathetic to Carillion, which used to be known as Tarmac. It has deliberately shrunk its construction business to focus on the more profitable sector of support services. Margins have improved from 1.6% to 4.1% but total revenues were 12% down as some customers took services in house, while others were slow to place orders. However, trading at just six times this year's earnings and yielding 6.7% Tempus thinks now may be a good time to buy, although "immediate progress may be slow".Pumps and steam processes firm Spirax Sarco gets rather short shrift from Tempus. Costs are rising and sales in Europe are, unsurprisingly, weak. Trading at 16 times earnings, the column believes the stock lacks upside. Avoid.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.BS