Companies: IQE    RAB    TTG   

Landsbanki Securities’ research team sees IQE, which manufactures silicon wafers for the semiconductor industry, as a buy in the wake of its return to operating profitability for 2007. The Icelandic investment bank bases its stance on the company’s prospects in a particularly fast-growing market and the continued diversification of its customer base. ‘Growth fundamentals continue to look robust,’ it writes. ‘And IQE should continue to gain market share.’

Automotive equipment-maker TT Electronics is no more than a hold, despite full-year profit figures from the fully listed group coming in above forecasts due to an unexpected £1 million pension credit. Analyst Andrew Carter is cautious in his outlook, mindful of tough trading conditions and rising restructuring spending. He leaves 2008 forecasts unchanged, though, at £30 million of pre-tax profit and 13.6p of earnings, placing the 85.75p shares on a forward price-to-earnings ratio of just 6.3, with a bumper yield. Even so, Carter expects investors ‘will want to see firmer evidence that forecasts have troughed’ before they increase weightings, bearing in mind the difficult markets TT Electronics faces.

RAB downgraded
In the financials sector, hedge fund group and serial AIM investor RAB Capital was downgraded on news of ‘mildly negative’ performance. While cutting its earnings estimate for 2008 to 6.6p (7.8p), the broker notes the share price already ‘discounts the quantum of these earnings downgrades’ and sees ‘good upside’ for fund performance and flows, should markets improve.

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