Companies: EXPN    WOS   

The analysts at Charles Stanley believe that consumer information group Experian is well placed to benefit from the global growth in consumer credit, internet usage and multi-channel marketing. Although Experian could be impacted by a consumer slowdown, the broker accepts it is something of a counter-cyclical business: higher interest rates could lead to a slowdown in demand for debt but it could also result in more credit checks.

The argument for backing the stock is strengthened by the fact that Experian’s competitors are mainly US-based and its share rating deserves a premium to these global peers. Charles Stanley begins its coverage of the stock with an ‘accumulate’ recommendation.

This bullishness isn’t extended to its FTSE 100 peer, construction materials supplier Wolseley – largely because a ‘substantial correction’ is underway in the US housing market and Wolseley is highly exposed. Other concerns include the £180 million working capital outflow in 2006. According to Charles Stanley, it was not surprising that on publication of its 2006 results, Wolseley decided to raise £650 million in a share placing to help restore its flexibility to continue its ambitious acquisition policy. All in all, the broker reckons that there could be downside risks to the forecasts it has in the market.