Clarkson - 600p

The middle months of the year can be mixed at best. The minds of potential investors in companies can often be more focused on faraway shores than where to make the best returns.

This is not to say that there are not buying opportunities around, but more patience than usual may be required to see results.

With this in mind, it is worth running the slide rule over Clarkson.

The company covers a wide range of services relating to shipping and has particular expertise in shipbroking, financial services and research.

Clarkson has an excellent track record and this leaves it well positioned with a healthy balance sheet.

With strong cash generation, even recently when there have been some litigation issues and the economic crisis to contend with, the business should be able to cope with a prolonged downturn better than most.

Although earnings per share fell to 41.9p last year after exceptional items, the forecast this year is for approaching twice that level.

Given the strength of the balance sheet the shares currently trade on a modest multiple of anticipated earnings and now may well be the time to buy, ahead of the next interim results in August.

The shares have traded above 1000p in each of the last three years. It is asking a lot for them to reach that level in the current year but the company looks sound and there is scope for the share price to move up. The shares have recently gone ex-dividend but a key positive feature remains the yield, which stands at an attractive 7per cent. This should provide good support and those looking for a long term play could do worse than picking up a few at the current price.

As a footnote, which is not entirely unrelated, the price of oil has spiked upwards. There is heated debate as to where the price may move to.

Supply issues could force the price higher but it also seems that the recent rally is based more on hopes of an improving global economy.

If that fails to materialise as quickly as many are hoping there is risk on the downside. There are plenty of options for both oil bulls and bears to get involved in the sector.

WARNING: Opinions expressed are the writers’ judgments at the time of writing. The information does not constitute a personal recommendation and readers should seek their own professional advice as to the suitability of the investments.