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Bab****’s strategic review should drive shares

A pending strategic review at Bab**** (BAB), the provider of outsourced engineering services, could be a ‘significant’ share price driver, says Jefferies.

Analyst Kean Marden retained his ‘buy’ recommendation and target price of 430p on the shares, which were trading 2.1% lower at 348.8p yesterday at the time of writing.

The group is planning a May 2021 strategic review, which Marden said was ‘likely to be a significant share price driver’.

‘In our view, the composition of total financial obligations may be realigned, new growth initiatives unveiled, and some non-core units exited,’ he said.

‘Management’s sustainable free cashflow focus is welcome and could revive materially in full-year 2022 if productivity recovers and cash exceptionals moderate.’

This is a frustrating share! All the Broker forecasts are above the current price and have been for a while. We’ve had some director buying and we have a new Vice President in the USA who I believe is pro cannabis legalisation, yet the share price languishes at near all time lows... I believe that the dollar has quite an impact on IMB’s figures, exchange rates etc and maybe fears of where the dollar might go could be a drag (pardon the pun) on the share price of some stocks. Just my ramblings, but I would welcome other peoples opinions. GLA

Bab**** has passed its ‘low point’, says Shore

Shore Capital thinks that Bab**** (BAB) has passed a ‘low point’, with its fortunes expected to improve running into the New Year and particularly 2022, as the post-pandemic recovery picks up pace.

Analyst Robin Speakman retained his recommendation to ‘buy’ shares in the provider of outsourced engineering services.

Results for the six months to the end of September showed debt falling year-on-year, from £1.1bn to £870m. The value of orders on its books also picked up, helping to sustain the buy case along with the ‘strategic need and opportunity for Bab****’s brand of essential engineering services delivery’, said Speakman

‘The order book appears intact, supported by renewed UK government support for the armed forces and with nuclear energy ambitions. We now anticipate that restructuring is now set to begin to dominate news flow, with the potential for some contract news flow increasing as government Covid pressures ease and as the UK agenda turns away from Brexit,’ said the analyst.

This stock sure moves around a lot on thin volume! 9% down on no news seems quite a lot to me.

Yes results are this week

Hi Draft, I can’t help you but I have been keeping an eye on these myself. They must have had a tough year with writedowns on their property etc but if it keeps falling it’s going to look interesting...

Camkite, what do you mean?

I read yesterday that EDF are going to bring forward the closure date of Hinckley Point B by two years due to cracking in the reactor wall. They can’t justify the repair cost for the age of the plant. I believe that the same is happening at Hunterston Power Station in Scotland. Am I right in thinking that CNA own 20% of these? Do the closure’s mean that CNA will have to pay 20% towards the de-commissioning as well as losing the revenue from these? I’m not sure who exactly pays for the de-com so if there is anyone on here with more info that’s be great.

Why the spike today? Have a missed an rns about NBI?

Hi Time2Buy,
I’ve been looking at these too and you seem pretty bullish. Have you seen any revised broker forecasts following the profits warning?

The Sunday Telegraphs Questor covered BT at the weekend and there verdict was avoid! I hope they are massively wrong as I’ve recently bought!

Is the issue with this share the fact that from 2022 all the nuclear power stations in the U.K. will be shutting. As well as no revenue from these power plants the decommissioning burdens begins. All EDF are the majority holder I believe CNA own 20%...

I’m not sure whether it is me being cynical but I can’t help noticing that BT and Shell have both just announced solid results in troubled times yet on BBC business neither companies city updates has made their main headlines... But if both had put out profit earnings I’m sure that it would have made the front page!

Is it me or is this now lower than when the market dropped in March? Yet we’ve had a respectable set of results and Imperial is still paying a divi.

Is the issue here the fact that the margins are being squeezed... The turnover is right up there but the margins are perhaps not as good as they were pre Covid...

Thanks Nickel

Guys, I think may be some of you could perhaps answer a question for me please... Between JKX and ENW who has the largest playing in gas over oil. Thanks in advance

HSBC remains at bottom of Shore Capital’s pick list

HSBC (HSBA) may have announced a pandemic-induced overhaul of its business model but the bank remains Shore Capital’s least preferred banking pick.

Analyst Gary Greenwood retained his ‘hold’ recommendation on the shares, which rose 3.4% to 330.1p yesterday. The bank revealed it would shift its main source of income from interest rate to fee-based business after a 35% fall in profits.

Greenwood sees the ‘fair value’ of the shares as 370p, which includes a ‘5% haircut for geopolitical risk associated with current tensions between China and the US, and the UK, in addition to our standard 5% haircut for future litigation and conduct risk’.

‘Although HSBC remains our least preferred name among the mainstream UK banks, and we continue to recommend a basket of Barclays, Lloyds and Standard Chartered as a better value alternative, we expect the shares to response positively [to the overhaul],’ he said.

Soup, I put Armchair trader into search and came up with the whole article, so no link required.
I would have thought that IMB, a divi paying stock would be trading higher now than they were in March...

Companies usually pay divi’s out twice a year or quarterly. I assume they intend to restart all payments to the same frequency as before.