Wednesday, June 29, 2011

SG Conglomerates

SG Conglomerates: Deutsche note that fundamentals still intact; with conglomerates trading near historical PER and P/B averages and strong prospects. News flow within the sector remains positive, and expect healthy long-term prospects for the key SG yards. Investments should continue despite recent oil price volatility….

Add that KEP and SMM well positioned with newbuild order momentum likely to continue strongly. Remain O/w on the O&M sector and believe KEP and SMM are well positioned to benefit from increased industry spending and any upgrade and/or replacement opportunities for offshore assets. House has KEP $13.60, SMM $7.00 and SCI $7.00 TP.

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