However, in my opinion, Johnson Matthey PLC (LON:JMAT) is currently trading at too much of a premium given the current uncertainty over the firm’s near-term fortunes. A P/E ratio of 15.7 for the current year is expected to remain high at 14.7 and 13.5 during the following two years.
Rolls-Royce Holding PLC (LON:RR)
Engineering leviathan Rolls-Royce Holding PLC (LON:RR) boasts world-class expertise across many lucrative growth sectors, and I believe that strident progress in the energy, marine and civil aerospace markets should reward investors with continued earnings growth.
Last month the firm reported underlying revenue up 8% to £12.2 billion for 2012, a result that drove underlying pre-tax profit 24% higher to £1.4 billion. In particular, the group’s prime position in the commercial airplane market continues to reap huge dividends, and is a sector that should underpin future growth.
Trent engine sales rose 23% during the second half versus the first six months last year, and the group’s entire civil aerospace order book rose 5% in 2012 to a healthy £50 billion.
The group’s earnings per share are forecast to rise 11% this year, according to broker estimates, and a further 9% in 2014.
Rolls-Royce Holding PLC (LON:RR) cannot be considered cheap, however, and the shares currently change hands on a P/E reading of 15.5 and 14.2 for 2013 and 2014 respectively. But I believe the diversity of the group’s operations across many red-hot sectors offers both peace of mind in austere times and appetising growth potential.
Fresnillo Plc (LON:FRES)
I believe investors should give silver miner Fresnillo a wide berth, as the current share price does not reflect the risks associated with the firm’s planned production ramp-ups. A choppy silver price could also exert fresh price pressure.
Fresnillo predicts annual production of 41 million ounces this year, flat from 2012 levels. It expects increased output at its Saucito complex to compensate for declining ore grades at its bellwether Fresnillo mine. Further out, the firm expects production of 65 million ounces per year by 2015.
City experts predict last year’s mining difficulties caused earnings to dip 13% during 2012, the actual results for which are due on Tuesday, 12 March. But earnings are then expected to grow 12% and 19% in 2013 and 2014 respectively as production accelerates.
Fresnillo trades on a P/E multiple of 21.3 and 17.9 for this year and next. But I think that, despite recent heavy weakness in the share price, the company remains overvalued at current levels. Any mistakes with the timing and quantities of the proposed ramp-ups at its facilities — a common problem in the mining industry — could send projected earnings tumbling.
The article Are Any of These 5 FTSE 100 Shares a Buy? originally appeared on Fool.com.
Fool contributor Royston Wild has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.
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