Sept. 27--Houses prices are rocketing, a construction boom could be underway and mortgages have become a bit easier to get so City experts today called on punters to pile into builders merchant and DIY specialist Travis Perkins.
Why? Well Goldman Sachs said investors can buy Travis Perkins to get a piece of this housing boom. The group, which also owns retailer Wickes, is attractive because "UK housing data and Travis Perkins organic revenue growth" have had a "historically strong correlation".
Goldmans pointed out that UK housing and construction data have continued to show signs of improvement with the Rics house-price survey at a seven-year high. The analysts think the "high operational gearing" of Travis will mean good top-line growth and a "faster pick-up in earnings growth".
Punters agreed and Travis built up a 27p gain to 1677p _ close to the top of the blue-chip index.
Goldman's experts declared that investors looking for clever buys should ignore "high structural growth" stocks and look at those that are "cyclically exposed" such as Travis.
Other stocks it was keen on today included office space provider Regus, up 6.5p to 187.3p and distributor of electronic components Premier Farnell, which produced a 7.8p rise to 218.9p and was top of the mid-cap index after the tip.
The wider market remained lacklustre for yet another day. The FTSE 100 slipped back 19.93 points to 6545.66.
Engineering support services company Babcock International joined Travis Perkins toward the top of the benchmark index after it said trading for the half-year to October remained positive. It secured a 21p gain to 1214.5p.
Bank of America Merrill Lynch decided to downgrade its gold price forecast and said the only yellow metal-miners still worth investing in are Randgold Resources, down 90p to 4455p, and African Barrick Gold, up 1.6p to 165.2p.
Recently Russian gold-miner Petropavlovsk has edged higher on rumours of bargain hunting and possible interest from chairman Peter Hambro to take it private. But Bank of America downgraded it to neutral because of "significant earnings downgrades" and the risk it could breach covenants next year. Petropavlovsk fell 0.75p to 77.8p.
AIM-listed Interior Services Group, ISG, announced it has sealed a pounds sterling 32 million deal to fit out the new Oxford Street headquarters of Arcadia, owned by Sir Philip Green, pictured with Kate Moss. Arcadia is the parent company of retailers such as Topshop, Burton and BHS. ISG built up a 2.5p rise to 241p.