Today we are watching…
1. Babcock International (#bab)
Babcock has been selected as a preferred bidder by the British Ministry of Defence for its newest fleet of warships, the Type 31 general purpose frigate. What’s interesting about this deal is the price tag. Coming in at a super-cheap £250 million each, the bargain basement boats could see orders come in from foreign navies, leading to economies of scale that will drive the price tag down even further. Analysts at Liberum believe the new contract will provide “greater financial certainty” for the company and currently rate their stocks as a ‘buy’ with a target price of 720p.
2. Lean Hog (#hog)
Lean hog has had a bit of a rally following China’s decision not to impose tariffs on US pork imports. It would have been a shot in the foot (or trotter) if it had as China is the biggest consumer of pork in the world and, with the growing spread of African swine fever, has severely affected its ability to meet its domestic consumption demand. In fact, pork prices in China have risen nearly 47% year on year, making for a disgruntled population. Until it can eradicate the fever and restock it’s hog population, China will continue to depend on imports; or become vegans.
