in Weir Group, said the Sunday Times 'Inside the City' column. The Glaswegian pumps and valves manufacturer enjoyed the boom of the US fracking industry while its shares topped £25 for most of 2014, they entered 2015 at less than £18 and exited at £10. The shale tale is tailing off and their lenders are beginning to wield the axe, which bodes ill for Weir, which counts the oil sector as a quarter of profits.
The mining industry, which represents much of the remainder, is not in much better a position, as global demand wanes. Yet worldwide oversupply in many metals could take years to unwind. The Glasgow company's management have slashed spending and yet analysts still forecast profits will be cleaved in half last year and continue to fall in 2016. A bid is a possibility but not one worth betting on yet.
Avoid Centrica's shares, argued Questor in the Sunday Telegraph. The British Gas owner may have impressed with recent full year numbers, boosted by profits at the UK's biggest energy provider up by almost a third thanks to falling gas prices, with US-based Direct Energy performing even better but profits at the UK business supply division declining slightly due to billing niggles.
The North Sea gas 'upstream' business was the major blip, with profits down by almost two thirds and assets written down somewhat savagely. Looking forward, the falling price of gas has led to big planned cuts in capital expenditure and a major haircut for staff numbers to try and produce savings of £750m a year. The 2015 dividend was cut and with pressure on domestic prices from continuing commodity weakness the ongoing income is a concern.
Constellation Healthcare is a share to buy for adventurous investors, according to Midas in the Mail on Sunday. The company is focused on the US, where under the 'Obamacare' regime, pressure from health insurance companies is forcing doctors to cut costs, turning to Houston-based Constellation's offshore workers to process bills more efficiently. Doctors are often joining together to create economies of scale from their practices as the regulatory burden becomes heavier.
Traditionally, small firms processed medical bills and Consetllation began buying them up since 2013, with sales and profits soaring increasingly as he outsources to workers in India to cut costs as the natural churn in the US industry sees minimum-wage staff leave before too long. Only 2% of 10,000 doctor clients move away once Constellation acquires their billing firm. Future plans are to more than double client numbers and maybe expand services outside of just billing.
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