Share tip of the week: buy into this rock-solid firm

This defence contractor missed out on the 'dash to trash', and its shares now languish at near three-year lows. This creates a good entry point for the cautious investor, says Paul Hill.

When will the City make up its mind? Before the credit crunch, the Square Mile encouraged firms to borrow up to the hilt. Then sentiment changed and those same firms were pilloried for taking on too much debt. Until recently when fund managers U-turned again, sending the valuations of many cyclical stocks through the roof. So it's hardly surprising the opposite has occurred for safe-havens such as BAE Systems, Europe's largest defence group.

BAE develops electronics and avionics for war-planes, manufactures ammunition and builds submarines and tanks for the armed forces. As it missed out on the 'dash to trash', its shares now languish at near three-year lows. This creates a good entry point for the cautious investor.

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Paul gained a degree in electrical engineering and went on to qualify as a chartered management accountant. He has extensive corporate finance and investment experience and is a member of the Securities Institute.

Over the past 16 years Paul has held top-level financial management and M&A roles for blue-chip companies such as O2, GKN and Unilever. He is now director of his own capital investment and consultancy firm, PMH Capital Limited.

Paul is an expert at analysing companies in new, fast-growing markets, and is an extremely shrewd stock-picker.