Kingspan gets recommendation

ABN-Amro is recommending Kingspan as a buy for investors. In its latest note on the group, the broker highlights Kingspan's management's objective of doubling turnover to #1.2 billion by 2002 (£950 million) by a combination of acquisitions and organic growth. It points out that the management team has a good track record in creating shareholder value.

The stock is currently trading at a 34 per cent discount to its British peer group. Some 80 per cent of the group's revenue is in Britain where the macro economic environment provides a supportive background. A strong financial position coupled with healthy cash flow generation will enable it to take advantage of further acquisition opportunities. Over the next 12 months, ABN-Amro predicts, the stock will trade close to #3.50.

Meanwhile, the broker is also bullish about Smurfit. The outlook for the paper and packaging sector remains favourable in the busy autumn period. It is now trading at a discount to its US peers but ABNAmro expects last year's de-rating of the stock relative to its US peers to be reversed as further positive "newsflow" emerges regarding the ongoing restructuring of the Smurfit Stone Container Corporation over the remainder of the year. While Smurfit operates in a cyclical industry, it accepts that this upcycle may be prolonged by the ongoing focus on shareholder value as seen across the sector over the past year.