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BP plc (ADR) (BP), Centrica PLC (CNA), EVRAZ plc (EVR): Are These FTSE 100 Shares Buys?

Kazakhmys plc (LON:KAZ)

I believe copper miner Kazakhmys could be set for further woe as falling production levels, rising output costs and the potential for fresh copper-price volatility could trouble the company.

City brokers anticipate a 64% plunge in earnings per share to be reported for 2012, results for which are due on Tuesday, March 26. Earnings are expected to dip fractionally in 2013 before falling 3% in 2014.

The company currently trades on a P/E ratio of 8.1 for this year and 8.3 for 2014, which is cheap given a forward earnings multiple of 15 for the broader mining sector. However, I believe that such a low rating is justified given worsening near-term production issues.

Last month’s trading update revealed a 2.3% fall in copper cathode production from its own sources last year, to 292,000 tonnes. And Kazakhmys expects output to come in between 285,000 tonnes and 295,000 tonnes in 2013.

The firm hopes to hike group output to 500,000 tonnes by 2018, but potential ramp-up problems and further copper-price weakness could continue to blast the bottom line — operating profits fell 70% in 2012 to $368 million, Kazakhmys said in February.

Smiths Group plc (LON:SMIN)

Shares in Smiths Group have maintained their rapid ascent, reaching near-two-year highs above 1,310 pence in recent days. And I believe its operations across a collection of red-hot growth sectors should keep delivering solid growth.

The diversified engineer has its fingers in many pies, and underlying revenues increased across all divisions in the three months to 3 November. Smiths Group’s product offerings straddle the oil, gas, health care and security sectors, among others.

Earnings per share are set to rise 3% in 2013, according to broker forecasts, with a further 7% rise penciled in for 2014. The accelerating stock price has caused the firm’s earnings multiple to leap to 13.8 and 12.9 for this year and next, compared to an average forward reading of 10.8 for other general industrials plays, but in my opinion, the strength of its businesses warrants this premium.

Moreover, Smiths Group is expected to continue steadily building dividends, with payouts of 39.9 pence and 42.3 pence per share expected for 2013 and 2014 respectively, up from 38 pence per share last year. These prospective dividends carry yields of 3.1% and 3.3% for this year and next.

The article Are These FTSE 100 Shares Buys? originally appeared on and is written by Royston Wild.

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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