Shares digital

Spirax-Sarco Engineering (SPX) 975p

The engineer has posted a higher full-year pre-tax profit on higher sales and said 2008 has started well. (Read the full story: www.sharesmagazine.com/node/3571)

Shares says: The figures were good but hard to justify its premium rating with a PE of 13.4 against the sector average of 12. Existing investors should sit tight, but those new to engineering may want to consider Goodwin (GDWN) as a company with strong prospects. HOLD

The Times says: Spirax-Sarco is the sort of engineer that comes into its own in a downturn. It is broadly spread geographically; its equipment is used in a wide range of industries (from confectionery and pharmaceuticals to mining and building materials); and half of its sales are drawn from the after market, through the regular replacement of worn parts as part of plant maintenance. The company’s orderbook may be short in duration – no more than a matter of weeks – but on current valuations, the shares should be tucked away for the long term.

The City Landsbanki says: Second half results were slightly better than expected, so we raise forecasts for 2008 by 8%. CEO-elec Mark Vernon’s message was one of ‘evolution, not revolution’. It trades at an appropriate premium to the engineering sector given the group’s predictability, organic sales growth track record, above-average margins and strong balance sheet. HOLD