Tag: Aggreko plc

My FTSE 350 top buy tips 2015

Nick’s spreadsheet shows us the real value of a company and measures a companies consistency of growth: here are my picks from Nick’s FTSE 350 spreadsheet. These companies show incredible potential future benefits and all with better than 80% consistency of grown.

I would look at buying within the next couple of weeks. You have, coincidently, proper sub-sector diversification here too.

Hargreaves Lansdown PLC, Rotork PLC, Intertek Group PLC, Weir Group PLC, Aggreko PLC, Premier Oil PLC, Playtech PLC, Randgold Resources Ltd, Rightmove PLC, Petrofac Ltd, Fisher (James) and Sons PLC, Aberdeen Asset Management PLC and Nostrum Oil & Gas PLC.

Energy companies, namely crude oil, will have a hesitant start to 2015 but then recover much of recently lost price.

In addition to the above companies, consider a simple index tracker of the FTSE 100, FTSE 250 and S&P 500. They will do well this year. Remember, the secret is attention to cost. Ongoing cost is more important than entry cost. Vanguard FTSE UK Equity Index has an entry of 0.4% of the fund but a low 0.08% current cost. Shop around.

Consider an ETFS Gold (LSE: Epic Bull). Gold will have a good 2015. Based on cycles we could see a gold high near the end of March, then a drop followed by a similar high end of October. For those that bought Centamin PLC look for a sell at one of these dates. Preferably the end of March.

Diversification through Treasury Bonds and Gilts are excellent for the longer term investor. If you don’t have these yet, then leave until next year. It is a fair assumption that interest rates will remain for a while and therefore Treasury Bonds will stay level or decrease slightly this year.

If you hold Domino’s Pizza, Burberry, Easy Jet or Hikma Pharmaceuticals – all previous recommendations – you could consider taking profits now. 

My next blog will be from Nick’s S&P 500 spreadsheet – for those that can invest in US stocks.

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Aggreko PLC (AGK)

For a long-term share purchase, AGK is worthy of consideration. They provide electricity generators for temporary power and temperature control solutions. Operating in about 100 countries with 194 service centres and offices in 47 countries.

From their last report, military contracts reducing but indicating higher profits in the 2nd half of year. Presently graded hold by many analysts. They have an impressive board, soon to include the former CEO of SSE plc. From a high of £24 last year, they have dropped to, presently, about £15 – matching a previous low in 2011.

We feel that they are about 25% of their future value if they can maintain growth which, to-date, has been excellent.  They have an acceptable amount of debt. However, their spend on assets has been high, and consequently, their cash-flow-growth has reduced. Last years profit margin was 24%, and their first six months of this year they are reporting a profit margin of 19%. Depreciation slightly high at 31%, but probably not unusual for a company such as this.

Regarding gross margin and spend on wages and admin the percentages indicate a well-managed company. Importantly their treasury shares purchases,  or share buyback, will help to increase share price long term. Overall, an opportunity to buy an excellent company at a discount price. In the short term, however, the price is still trending down. So buy cautiously.

If it continues down further, it provides another buying opportunity. A purchase for the longer term.

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Aggreko plc (AGK) £14.70

Aggreko plc provides power and temperature control solutions to customers who need them either very quickly, or for a short or indeterminate length of time. Recently downgraded by Credit Suisse, they feel that demand will not be there for AGK in the 2nd half of the year. However, AGK say profits will be higher in this period! Share price has dropped from a £24 high last year. Price has bounced slightly just above £14, next drop would probably be down to £12. However, we like AGK’s board. The company also has a wonderful consistency of growth at 92%. We show long term share value of £64. AGK have some debt at 1.6 years of profits. And their capex to EPS is high, however, their value and growth charts are all good except cash flow growth which is reducing latterly. End of year operating margin was 24% and this has dropped the last reported 6 months to 19%. Depreciation sits at 31%, slightly high. They are buying treasury stock, a good sign for the future share price. 

Tide is down, wave is also down and ripple currently showing a move to up. If this is the bottom then share price would be about £16.5 before the tide showed up. A short term buyer, or spread better, would need to wait for the tide. However, for a long term purchaser, this could be a good time if you accept price could fall to £12 before recovering. Your call.

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