Wednesday tips round-up: Hays, Aggreko, Rio Tinto, BHP
Wed 10 Oct 2012
LONDON (SHARECAST) - The mood music from the resources sector has worsened in recent weeks. Thus, Rio Tinto, the third biggest miner in the world, has lowered its estimates for China’s growth this year to “just below” 8 per cent, down from the around 8 per cent growth it expected in August, chief executive Tom Albanese told investors yesterday. Similarly, a spokesman for BHP Billiton stated that: “Against a backdrop of increasing costs and falling commodity prices, we continue to focus on reducing our overheads and operating costs,” said a spokesman.” Yes, China is slowing. But the massive process of urbanisation taking place across the world’s younger economic powers is a story that will be told for decades, not years. The Telegraph´s Questor team says they remain a BUY. At a push, BHP is preferred over Rio because it is more diversified away from iron ore, the steel-making ingredient, towards the later-stage commodities on which China’s maturing economy will increasingly rely.
The Times´ Tempus column says recruiter Hays’ first quarter performance to the end of September was better than the market had feared and better than that of its rival, Michael Page International. Most analysts are shooting for pre-tax profits in excess of Ł122m for Hays this year and next, which would be an unchanged outturn from last. The shares, up 4.25p at 79.5p, are on 14 times earnings and so well up with events.
Aggreko, the temporary power company, ended more than 3% down at Ł22.40 after a downgrade from HSBC Securities. Tempus adds that some of us had been wondering when this perpetual motion machine would run out of juice – the shares are still 18% higher since July. HSBC suggests there may have been a cooling in the company’s end markets in recent months. Perhaps time to take at least some profits?