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Halma (HLMA) 208.25p

The maker of products for hazard detection and life protection, according to number crunchers at Goldman Sachs, outperformed the European engineering sector by around 35% since the market sell-off started in October 2007. The investment bank now flags up Halma’s large exposure to the non-residential construction markets in Europe and the US, which could be a serious problem for the company. While a slice of the company’s top line should be secure, there will be scope for earnings declines and this risk is not priced in the shares, reckons Goldman Sachs, which forecasts that the European and US non-residential construction markets will fall 2% and 3% respectively in 2008, and 15% in both markets in 2009. The bank downgraded the company from neutral to sell, and while longer term attractions are evident, the shares look at risk of further falls in the short term.

ACTION: SELL Halma • Target 190p • Stop Loss 218p

TIME TARGET: 5 WEEKS