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Company spotlight: Morgan Sindall


SELL in May and go away is an old stock market adage and one many traders embraced in the lat ter half of last month.

The damage inflicted by this wholesale selling hit many construction industry shares, including Morgan Sindall.

Investors checked out of stocks for reasons not directly related to the companies themselves, which must frustrate executives at Morgan Sindall, having overseen a very positive period for the business.

In February, the firm posted record results for 2006 with expectations of further growth this year and there is little reason, despite the recent fire sales, to change that view.

In the last year, the shares have motored up from 739p and touched 1,274p before the recent retreat. But the market appears confident of more growth and analysts that are negative on the stock are hard to find.

Stockbrokers Numis recently upgraded the stock from 'add' to a more positive 'buy' only a week after raising its rating from 'hold' to 'add' when the target price was 1,350p.

Reasons for this optimism are a wide-ranging business that will benefit from a recent improvement in the infrastructure sector, where Morgan Sindall bagged another £265 million-worth of work.

Affordable housing should only strengthen with Lovell a dominant player in this market and continuing to exploit more opportunities for private residential development that arise out of public-sector work.

With fit-out work also picking up as commercial activity gains ground, the recent dip in the shares presents an opportunity.