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Not Too Much to Fear About a Punt in Weir, I Fancy

By Malcolm Stacey | Friday 10 August 2018

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

Hello, Share Smackers. It won't have escaped your notice that one of the main reasons the Footsie stays high is the rise of mining shares. On most recent days, the big such companies are on the big index's leaderboard. But, as always, some miners do better than others.

Therefore, it makes sense to invest in a company which doesn't mine itself, but which supplies the industry. That way you can exploit the trend while spreading the risk. Weir Group (WEIR) is a company which supplies mining gear to the planet's big producers of metals and minerals. It also does valves, pumps and turbines for the ebony nectar game.

The company is big. It has 14,000 employees and customers based in 70 different countries.

The shares have not done much lately, but that can be a sign of a log jam about to be broken. The recent resurgence of mining shares could trigger that. Weir does pressure pumps used in the fracking game. That way of working is spreading fast around the world.

Weir knows that mining is the in-thing and so has hit the expansion trail. It recently bought up a Yankee firm called Esco, which also does mining gear. The price was $1.3 billion. So let's hope it was worth it. It is hoping to raise a quarter of a million quid by selling off a 'flow control' part of the business.

Long gone are the days when all you needed was a shovel and willing lads to put their backs into it. Nowadays, the most profitable way of pulling stuff out of the ground is to have the latest equipment. The big miners know this, which is why their investment in the sort of top quality stuff Weir provides is likely to grow fast.

Unlike trade in the Punter's Return.

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