Tuesday tips round-up: Petrofac, Halfords, Bovis...

Yesterday, Petrofac forecast a 20% surge in net profits for the full year as it announced its first contract win in Iraq.
The country needs to spend an estimated $200bn (£128bn) over the next decade on just the kind of services that it provides: designing and building the oil wells, pipelines and processing plants on which the industry depends. Petrofac shares have had a storming run since the start of last year. At £14.10, they sell on more than 17 times earnings. A little toppy; perhaps time to take some profits, suggests the Times.

Bicycles-to-car parts retailer Halfords, which currently trades on a 2011 p/e ratio of 10.7, has long been touted as a defensive stock, but its acquisition strategy could further oil its shares over the coming year. In February, Halfords expanded its servicing and repairs business by acquiring Nationwide Autocentres, which had 224 outlets at the time, for £73.2m. Last month the chief executive, David Wild, said Halfords was considering up to 12 further takeover targets.
In addition to its progressive dividend policy, Halfords, which sells one third of the bicycles bought in the UK, has a growing accessories and camping business, which sets it up well for a challenging year ahead, says the Independent.

Housebuilder Bovis is undeniably well positioned for any upturn. It has been squirrelling away land and now sits on enough to last for seven years, based on last year's admittedly flat sales. This is relatively high for any housebuilder, though perhaps not at this stage in the cycle. The shares, which nearly hit 450p a couple of times this year, are now 342Ÿp. Until the prospects for the sector are clearer, it is too soon to chase these shares, the Times reports.

The fallout from the collapse of Lehman Brothers has spread even wider than we thought at the time. It even put the kibosh on the shipping market, in the words of Tim Harris, chairman of James Fisher & Sons. Now, the indications are, according to Fisher, that the tide has now turned. Fisher shares have risen sharply since the spring and now sell on 11 times this year's earnings. A solid hold for recovery says the Times.


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