Today's Falling Knife: Lamprell Down 42%

LONDON -- Lamprell (ISE: LAM.L) slumped 52 pence, or 42%, to 71 pence this morning to become the session's heaviest casualty in early trade.

The engineering services contractor admitted forthcoming first-half losses would be wider than expected and said waivers to certain banking covenants were now being sought.

Lamprell claimed "a further review of its financial position" had unearthed additional costs relating to certain project delays.

First-half losses are now expected to be approximately $45 million, versus the $20 million previously forecast.

The contractor also scrapped its full-year profit guidance, and said a 12-month loss of between $12 million and $17 million should now be expected.

Today's statement follows a botched profit warning in early June, when Lamprell issued the bad news through an AGM statement released five minutes after the market had closed. The company had published the AGM's voting results earlier in the day.

The AGM fiasco was preceded by a controversial profit warning in May, which saw two senior managers sell shares around 360 pence to raise a total of 1.6 million pounds just two weeks before.

With Lamprell's shares down a thumping 81% since their May peak, clearly the business has its problems. Certainly in today's knife-edge market, smaller companies can be punished severely if they hit trouble.

So if you are seeking somewhat more reliable investment opportunities, the Motley Fool has produced a special free report that could assist your investment decisions.

"8 Popular Large-Caps Held by Britain's Super-Investor" reveals the big-name favorites held by Neil Woodford -- the City fund manager who has thrashed the FTSE during the five, 10, and 15 years to 2011. Unlike Lamprell, many of Woodford's current selections have been hitting fresh 52-week highs of late.

However, Lamprell may well be an opportunity for the very brave. Indeed, they say profit warnings always come in threes, and today's statement is the third.

In fact, if you are keen to earn handsome returns from higher-risk shares such as Lamprell, this free Motley Fool report -- "10 Steps to Making a Million in the Market" -- could help you on your way.

The report explains how taking a contrarian view and backing unloved companies is a vital step on the path to the magic million milestone.

Just click to download "8 Popular Large-Caps Held by Britain's Super-Investor" and "10 Steps to Making a Million in the Market" today. But hurry, because the reports will remain free for a limited time only.

Investing is by no means easy in today's uncertain economy. That's why we've published "Top Sectors of 2012" -- our guide to three favorable industries. This free report will be dispatched immediately to your inbox.

Further Motley Fool investment opportunities:

The article Today's Falling Knife: Lamprell Down 42% originally appeared on

Maynard Paton does not own any share mentioned in this article. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.