Wednesday tips round-up: Lamprell

Management of oil rig maker Lamprell has lost a large chunk of its credibility. Its record of substantial mis-steps over the past few months has been extraordinary - and very costly for its shareholders. Last week, the company issued its second profit warning in a matter of weeks. This was made worse by the fact there were concerns about the timing of the announcement - as there were when it issued its first warning. Share price targets still imply substantial upside. Lamprell has not given any firm guidance on profits for 2013, so it is likely that there will be further cuts to consensus. It is also unlikely that margins will reach the 8 per cent level that is really needed. Those investors inclined to cut their losses should do so. However, despite Questor's urge to issue a sell recommendation on these shares, it probably would not be the best decision at this level when emotion is taken out of the decision. Yesterday, Investec cuts its target on Lamprell shares to 100p but the average target, as tracked by Bloomberg, is 147¾p, almost double the current price. The shares were last tipped as a buy on May 2 at 362p, after being first recommended at 259.2p in November last year. They are now almost 80 per cent below the highest recommendation price. Through firmly gritted teeth, Questor says hold.ABPlease 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.