LONDON — I have recently been evaluating the investment cases for a multitude of FTSE 100 companies.

Although Britain‘s foremost share index has risen 9.1% so far in 2013, I believe many London-listed stocks still have much further to run, while conversely others are overdue for a correction. So how do the following five stocks weigh up?

Meggitt
I believe that revenues in aerospace and defense play Meggitt  are primed to take off due to rising exposure to the civil aerospace market. Turnover from this segment increased 7% in 2012 to £715 million, the company benefiting from its position as a major components supplier to the world’s leading aircraft builders.

Meggitt announced just last month that it had signed a mammoth $175 million contract with CFM International to provide thermal-management products for its LEAP engine variants, which will power the Airbus A320neo, Boeing 737MAX and COMAC C919 civilian-aircraft fleets.

Analysts expect earnings per share to rise 3% in 2013 before accelerating 9% in 2014, and Meggitt currently trades on a price-to-earnings (P/E) ratio of 13 and 12 for 2013 and 2014 respectively.

Although projected dividend yields come in below the 3.5% FTSE 100 average — yields of 2.6% and 2.9% are expected this year and next — the company has steadily increased shareholder payouts in recent years, and a dividend of 11.8 pence in 2012 is expected to rise to 12.6 pence and 13.8 pence this year and next.

Intertek
Product-testing specialist Intertek  has showcased excellent resilience in recent years, posting strong double-digit growth despite ongoing travails in the global economy. However, I believe that highly elevated earnings multiples at present mean that solid growth projections appear to have been already priced in, leaving little upside for investors.

Intertek currently operates more than 1,000 laboratories covering some 100 countries, and whose operations encompass a vast spectrum of industries, which has helped to insulate it from weakness in individual markets. The firm also has strong exposure to a conglomeration of red-hot growth markets, while rising activity in emerging markets should also underpin future expansion.

Turnover jumped 17% in 2012 to £2.1 billion, the company announced at the start of the month, pushing pre-tax profits 19% higher to £308 million.

Earnings per share are set to rise 14% in both 2013 and 2014, according to broker forecasts. However, the company currently changes hands on P/E multiples of 22.7 and 22 for these years, suggesting that strong growth rates are already factored into the current stock price.

BHP Billiton
I reckon that investors should steer clear of BHP Billiton  as a backdrop of volatile commodity prices, adverse currency movements and increasing output costs looks likely to keep the mining giant under pressure.

In particular, the company’s crucial iron ore operations look set to experience increasing woes in the next few years as steady production ramp-ups and subdued demand push the market into heavy oversupply. As well, its metallurgical coal, aluminum and nickel businesses should also suffer from excess supply over the medium term at …read more
Source: FULL ARTICLE at DailyFinance