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The Expert View: L&G, Associated British Foods, Redrow
by Chris Marshall on Sep 19, 2013 at 05:01
Smiths Group ‘fundamentally undervalued’
Smiths Group (SMIN.L) is ‘fundamentally undervalued’ – but perhaps yesterday’s news of a 30p special dividend will help wake up investors to the engineering firm’s potential.
That’s the view of Investec analyst Michael Blogg after Smiths on Wednesday announced a small rise in full year profits to £560 million from £554 million the previous year, alongside the special payout.
‘The negatives have been well flagged and action is being taken in every division to raise returns, helping to pay for new products and shift further away from dependence on government spending,’ wrote Blogg.
‘The group already generates good margins and it is pushing to raise them further.’
Blogg raised his target price to £15.90 from £15.00, and keeps his ‘buy’ rating.
Smiths shares rose 2.6% in Wednesday trade, to £14.16.
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