LONDON Wednesday tips round-up: G4S, Segro, Spirax-Sarco

G4S, which notched up a resilient performance during the recession, is growing steadily in most of its markets, and that is likely to continue, according to the Investment Column at the Independent. Just look at the UK: the FTSE 100-listed business has lost its contract to transport prisoners to and from British courts. But it has picked up plenty of new work to offset that. With a coalition Government keen to outsource more work to the private sector, together with the fears created by the recent riots, the company's business has good prospects. 

Looking at the stock, we said buy at 258.6p in March and the shares are little changed from that, having found some momentum over the last few days having been caught up in the recent turmoil which hit shares indiscriminately. G4S shares should serve investors well over the coming months, according to the Independent, which recommends to buy. 

Segro has 92 per cent of its UK portfolio in London and the South East, or 70 per cent of the group total, notes the Tempus column in the Times. In Europe, it is in Paris and German industrial cities such as Frankfurt and Hamburg, and in Poland. As the London economy apparently decouples itself from the rest of Britain, Segro sees the benefit of this. Vacancy rates across the group fell from 12 per cent in end-December to 11.4 per cent at end-June and are on track to reach an unofficial target of 10 per cent. 

Segro is benefiting from the lack of speculative building of industrial space since the economic downturn started, which has meant a shortage in sought-after locations. Again, its London and South East bias helps. The shares have been among the worst hit in the sector and even after yesterday’s 2.7 per cent rise to 224.75p are on a discount to net assets to about 35 per cent. That looks overdone, if you are reasonably sanguine about the macro-economy, says the Times. 

FTSE 250 company Spirax-Sarco Engineering is a solid business that, unusually for an engineering group, proves relatively resilient in a downturn, writes the Questor team in the Telegraph. Spirax has a hugely diverse customer base, spanning breweries to oil refineries, paper mills and dairies. The company has grown sales by an average 9pc a year over the past 25 years – even the tougher past five years it has managed an average 8pc a year. It is a hugely cash generative business, and has held or increased its dividend for the past 44 years. With that track record, the shares look cheap on 12.5 times next year's earnings, particularly for a company that beats its peers in a downturn. A strong buy, says Questor.