Shares digital

Renishaw (RSW) 620p

The engineering group expects a strong second-half performance on the back of increasing demand and the weak pound. (Read the full story: www.sharesmagazine.com/node/2975)

Shares says: The company has been recovering from a cyclical downturn dating back to 2001. The weak dollar and issues with Japanese customers hit the 2007 performance, but things are looking up for Renishaw. Worth noting is the company’s exposure to less cyclical industries such as aerospace and healthcare. HOLD

The Times says: There are not many mid-cap engineers that can reasonably claim the next six months will be better than the last. Such is the position of Renishaw. Not that first-half figures were weak. Three developments bode well for 2008. A six-month export ban on Mitutoyo, of Japan, one of Renishaw’s biggest customers, expired this month, which should start to be felt in its order book. With 93% of Renishaw’s output exported, its reported profits have been held back by a weak dollar and should benefit from its recent strengthening. Most important, Renishaw has launched Revo, a handheld measuring device, after an 18-month delay, to be followed shortly by a cheaper version. HOLD

The City - Numis says: The shares are trading on an annualised 2008 full-year PE of 14.7 falling to 12.5 in 2009, a 12% premium to the UK electrical equipment sector. This is warranted given Renishaw’s market-leading position as a premium operator in a specialist market. Recent trading has been boosted by good demand in the Far East and strong growth in existing product types. ADD