Shares digital

Growing interest is surrounding precision instruments supplier Spectris (SXS), one of the few bullish engineering companies in a sector that has been hammered by concerns over a US economy slowdown.

The £772 million market cap makes precision instruments and control systems, which help manufacturers in many industries – from resources to pharmaceutical – to make a fast return on investment by enhancing manufacturing precision and efficiency. Its shares, however, have fallen by more than 25% over the past three months, to around 667p, prompting some to suggest a recovery is on the cards.

The sector overall, according to analysts at Numis, has fallen 30% since mid-October but it has placed an ‘add’ recommendation on Spectris following on from the latest trading update, which suggests that margin expansion going forward will support strong earnings growth.

Its analysts believe it could deliver compounded annual growth of 15% over the next three years. Meanwhile analysts at ABN Amro responded to the recent trading update by saying that 2007 EPS could come in 6% higher than expected, adding that its EPS forecasts are growing faster than its peers.

Shares says: An attractive investment in the sector, and it's cheaper than its peers.

by: Carlo Svaluto