Amec’s strong performance should impress medium risk investors

As Amec updates the market Helal Miah, investment research analyst at The Share Centre, explains why he recommends investors ‘buy’ the stock.

“With the oil support services sector under pressure investors will be pleased with Amec’s interim management statement this morning. Trading continues to be in-line with expectations as the order intake and forward visibility remains good. There has been a strong performance in the UK North Sea and US Renewable markets and the order book now stands at £4bn after winning a number of contracts in the latest reporting period.
 
“Amec continues to invest in its end markets and demand for its services particularly from the conventional oil and gas sector offsetting weakness from oil sands and mining markets. Work with EDF on nuclear power continues, including the building of new nuclear power stations.
 
“The full year underlying revenue is expected to be in-line with 2012, with second half margins expected to improve from the first half, reflecting the usual seasonal uplift. The full year 2014 earnings are expected to be above 100p. Investors will be pleased to hear that the company may return some capital to shareholders by year end.
 
“Sentiment across the sector has been depressed on a weaker outlook for 2013 but Amec’s more diversified portfolio of businesses and good results has seen the share price hold up better than its peer group. We continue to recommend medium risk investors ‘buy’ Amec.”