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Should you buy Tuesday’s ‘hidden’ heroes after their updates?

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Aircraft service provider BBA Aviation (LSE: BBA) has seen its share price take off in Tuesday business, the stock last 7% higher following the release of perky half-year numbers.

BBA Aviation enjoyed a 12% revenues surge during January-June, to $1.23bn. This propelled underlying pre-tax profit 51% higher from the corresponding 2015 period, to $119.4m.

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On top of this, the FTSE 250 firm advised that last year’s game-changing acquisition of Landmark Aviation was “proceeding well and synergy delivery [is] ahead of plan.” And BBA Aviation’s critical Flight Support division continues to perform admirably in a flat market, with organic revenues here rising 3.6% in the first half.

Today’s share price rise leaves BBA Aviation on a slightly-heady forward P/E rating of 17.3 times. But I believe the flying ace’s rising dominance in the corporate jet servicing sector merits this slight premium. And a chunky dividend yield of 3.7% takes the edge off.

A mixed bag

WS Atkins (LSE: ATK) has paused for breath following recent strength, the firm’s share price striking six-month peaks in the lead-up to today’s financial update.

WS Atkins advised that it had “traded in line with expectations through the first quarter,” adding that “we remain confident for the year ahead, despite continued uncertainty in some of our markets.”

The design, engineering and project management consultant has made a “good start” in its UK and European markets, with no immediate impact being felt from the result of the EU referendum. WS Atkins has also performed well in North America since April, it advised, although conditions remain “challenging” in the Middle East and at its Energy division.

WS Atkins deals on a very decent P/E ratio of 11.9 times for 2016 at current share prices, suggesting that the troubles facing the oil and gas segment — combined with the problems potentially thrown up by Brexit — are priced-in at current levels. I for one would be happy to sit on the sidelines for the time being however, given the uncertainty facing some of its end markets.

Construction conundrum

Morgan Sindall’s (LSE: MGNS) share price has fallen off the proverbial cliff since the start of June, a worsening outlook for the construction sector sending the stock almost 25% lower.

Still, a reassuring half-year update on Tuesday has provided investors with much-needed cheer, the stock last dealing 6% higher from Monday’s close.

Morgan Sindall saw revenues decline fractionally between January and June, to £1.15bn. But adjusted pre-tax profit leapt 21% during the period, to £16.1m, the company reporting a “continued recovery” in its Construction & Infrastructure business.

But like WS Atkins, Morgan Sindall warned of long-term uncertainty created by Britain’s decision to leave the EU. And latest construction PMI data suggests that fresh turmoil could be just around the corner — data today showed building activity contracting at its fastest past since 2009 in July.

Morgan Sindall certainly provides decent value for money on paper, the firm dealing on a P/E multiple of just 8.1 times for 2016. The firm also carries a market-busting yield of 5.3%

Regardless, I reckon the rapidly-deteriorating state of Britain’s construction segment makes Morgan Sindall a risk too far at present.

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Royston Wild has no position in any shares mentioned. The Motley Fool UK owns shares of and has recommended BBA Aviation. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

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