Mindful Money’s Monday share tips: BAE Systems, Ashmore, Vedanta

6th October 2013


This week mining group Vedanta Resources, aerospace and defense giant BAE Syetems and asset manager Ashmore update the market. We look at the broker sentiment in the run-up to their announcements writes Philip Scott.

On Wednesday FTSE 100 listed miner Vedanta Resources updates with its second quarter results and investors no doubt will be keen to hear production and resource estimate updates. The metals and mining group, which has its main operations based in India, has seen its share price stagnate in the past year, with a 1% fall for the period. The past three months have seen it edge up by the same amount.

Broker sentiment across shares data hub Digital Look, is ‘neutral’ towards the stock, however Sheridan Admans, investment research manager at The Share Centre, currently lists Vedanta as a ‘buy’.

He says: “Its Cairn India business has been a very good acquisition with a successful track record of finding oil but mining operations have suffered due to restrictions in certain states.

“Now that some of these have been lifted investors will expect an update on the progress on the resumption of production. Vedanta’s primary market is India so investors will also look for guidance from management on the economy, which has gone through a period of uncertainty.”

Thursday sees one of the world’s biggest weapons and aviation groups BAE Systems deliver its third quarter trading update. The past year has seen its shares rocket by 36% with a 19% gain in the past six months alone.

An update with regards to its Typhoon aircraft contract with the Kingdom of Saudi Arabia, which has helped boost its stock and coffers could be forthcoming. The group’s push towards diversification in terms of both product and geography may also potentially feature.

Keith Bowman, equity analyst at Hargreaves Lansdown Stockbrokers says: “With government spending pressured for its key markets, a further £4.8bn of non-UK/US orders were reported in the first half of the year. In addition, the company’s recent success in winning a civilian aircraft maintenance contract may also be underlined.

“Ahead of the announcement, and with the share price having outperformed the broader FTSE-100 index by a near 29% over the last year, analyst opinion currently points towards a ‘hold’.”

The FTSE 250 listed value-oriented emerging markets asset manager Ashmore Group is also updating on Thursday, with an interim management statement. The broker consensus has the stock edging towards a ‘buy’ on Digital Look following a 10% share price rise over the past six months.

Admans is calling the stock a ‘hold’ for now though. He says: “Having reported results less than a month ago, there is unlikely to be any significant news from the company. However it is focused on emerging markets and there has been growing pressure on that sector, so comments on the outlook and currency volatility in the regions it is exposed to will be worth noting.”

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