The company has a diverse end-user base with no single industry accounting for more than 10 per cent of its revenues. By being a provider of niche products into a range of industries, Spectris is well-placed to counter many of the challenges facing other industrial companies.
Its dominant position has allowed the company to increase prices in recent years and its "assembly-only" business model ensures that it has limited exposure to rising input costs. In addition, rising wage levels seen in emerging markets is likely to accelerate the automation of production processes, boosting demand for Spectris's products, as companies seek to offset wage rises against improved efficiency.
With over 300 million headroom on its balance sheet to finance acquisitions, the company has the firepower to consider smaller "bolt-ons" as well as more transformative deals.
With strong organic growth prospects, good pricing power and a tightly controlled cost base, we believe that management's target of 20 per cent operating profit margin is achievable.
Scotsman says BUY
• This article is for information and discussion purposes and does not form a recommendation by the manager to invest or otherwise.
Robert Wiseman Dairies
Broker says HOLD
Royal Bank of Scotland said that although results were in line with expectations it had made "significant cuts" to its forecasts for Wiseman, which is struggling to recover higher input costs in an intensely competitive market. It added: "We do not expect this situation to change in the near term."
Lloyds Banking Group
Broker says BUY
Arturo de Frias, head of banks research at Evolution Securities, said that despite being "plagued by major uncertainties", Lloyds was his "top conviction buy", adding. "Lloyds is the only bank in our coverage where we think investors might have a realistic chance of doubling their money on an 18-24 months view."