Tipped 2Day by WatsHot.com25 Jan 2008 12:51
Valuation____
The above earnings estimates suggest a rating of 14.9, falling to 13 in 2009 and 11.6 in 2010. If we strip out net cash of around £1 per share we get figures of 11, 9.7 and 8.7. That sort of rating looks attractive given the company's excellent operational track record, highlighted by a consistent post-tax ROCE (return on capital employed) of 22%. Using a sector comparison here would be largely artificial as Hamwothy has a breadth of exposure to different markets, but for what it's worth the oil services and equipment sector - which is the sector the company is most exposed to - trades on a current rating of around 23 falling to around 18 in 2009. I reckon the recent - and undeserved - fall in the share price offers a great opportunity to buy into what should continue to be a popular stock for the foreseeable future.___ At 393p, buy.