MIDAS SHARE TIPS UPDATE: Shares in aviation group Meggitt still have a way to fly
Cheer in the stock market might be hard to find right now, but those who took heed of Midas's advice to buy aviation engineering group Meggitt at £4.37p in April last year are sitting on a profit.
The shares closed at £4.97 on Friday, and many brokers believe they have further to go. Last week, Goldman Sachs raised its target to £6.26p, having already raised it before Christmas in expectation of 'strong growth'.
The Dorset-based firm, which can trace its roots back 150 years, has much to recommend it in turbulent times. The parts it provides to both civil and military aircraft have become vital to safety, and its clients include all of the major aircraft manufacturers including Airbus, Boeing and Bombardier.
Hot tip: Meggitt makes parts for military and civil aircraft
If you've been in a plane recently, chances are that Meggitt has been involved in providing some of the wheels, seals, valves and brakes, while the firm's technology also ensures fuel tanks don't burst into flames on impact.
Meggitt has the benefit of three diverse income streams, which helps to stabilise results if demand in one area dwindles. The defence sector provides a third of sales, while 55 per cent comes from commercial aircraft and the remainder comes from the energy industry.
Once Meggitt has provided the parts for an aircraft, it tends to be involved in the maintenance and replacement of them for years to come, providing revenue predictability. That doesn't mean Meggitt has been immune to headwinds.
The firm has struggled to rein in costs in some divisions, especially the one dealing with polymers and composites, and this has dragged on shares in recent months.
Chief executive Tony Wood said in August, when the company announced its half-year figures, that this was turning around. Expect further updates on this next month, when the firm announces its fullyear figures.
Midas Verdict: With a healthy dividend yield of over 3 per cent on estimated figures for 2018 and continued progress on reining in costs, it is worth holding on to Meggitt at this level to see if it has further to fly.
Most watched Money videos
- Iconic Dodge Charger goes electric as company unveils its Daytona
- Mini celebrates the release of brand new all-electric car Mini Aceman
- Skoda reveals Skoda Epiq as part of an all-electric car portfolio
- Mini unveil an electrified version of their popular Countryman
- Land Rover unveil newest all-electric Range Rover SUV
- 2025 Aston Martin DBX707: More luxury but comes with a higher price
- How to invest for income and growth: SAINTS' James Dow
- Mail Online takes a tour of Gatwick's modern EV charging station
- 'Now even better': Nissan Qashqai gets a facelift for 2024 version
- Tesla unveils new Model 3 Performance - it's the fastest ever!
- Mercedes has finally unveiled its new electric G-Class
- The new Volkswagen Passat - a long range PHEV that's only available as an estate
- Elementis shareholder calls for boss Paul Waterman to quit
- Hipgnosis Songs Fund agrees £1.3bn takeover by Blackstone
- BUSINESS LIVE: FTSE 100 hits another peak; Ocado boss...
- MARKET REPORT: Frasers Group in fashion as it unveils...
- FCA at war with City over plan to 'name and shame' firms...
- First profit for Vinted as young shoppers turn their...
- Inflation 'brought to heel' as shop prices rise by just...
- The soaraway UK funds that even beat the mighty Warren...
- My dementia sufferer mother has been paying my brother...
- US private equity giant in £1.3bn swoop for troubled...
- Delivery app Getir pulls out of UK in major setback for...
- Petrofac delays results amid warnings it will miss bond...
- Online state pension top-ups FINALLY launch after This is...
- S4 Capital board shake-up as founding member retires...
- Tesla surges on hopes of Chinese self-driving deal
- BHP urged to improve its offer for rival Anglo American
- Britain is seeing the green shoots of a recovery, says...
- Charlotte Tilbury owner Puig set for £12bn Spanish float