You wouldn't reject a car because the radio wasn't working. Yet the City appears to be willing to shun a £15bn company because of a little difficulty with a company it bought for a sixth of that.
Unilever is by anyone's account one of the world's leading consumer goods companies. Its brands stretch from the likes of Hellmann's mayonnaise and Dove face cream to the delights of Ben & Jerry's ice cream and Knorr stock cubs. Yet this year it has been hit hard by concern about SlimFast, the diet foods business, which has suffered because of competition from the Atkins diet.
However, SlimFast is fighting back and even if its recovery takes some time, it is one of some very strong brands from a group that is continuing to grow revenues by 6 per cent per annum. Unilever will return to favour. Get in at 520.5p while it's cheap.
The support services company has come in for a lot of flak of late - some of it from this newspaper. In particular, Jarvis has been attacked for the way it has handled the Potters Bar derailment and problems with some of its schools PFI projects. The City has taken note, and Jarvis has seen its shares fall 46 per cent from their July high. But traders have overreacted to the flow of bad news. Paris Moayedi, the former chairman whom many blamed for Jarvis's troubles, has now left, replaced by Steven Norris, the Conservative London mayoral candidate. Hardly a shy and retiring type himself, he nonetheless has a decent business brain and could well steer Jarvis into calmer waters. And investors' biggest worry about Norris - that he'll quit if he becomes mayor - must surely be misplaced.
If Norris succeeds, then in 2004 Jarvis could be judged on its financial performance. The company recently posted a 77 per cent increase in pre-tax profits to £33.7m in the first half of the year, and at 206p it looks cheap.
Scottish & Newcastle
In time, 2003 could prove a defining year for Scottish & Newcastle. The owner of Foster's, Kronenbourg and Newcastle Brown Ale found a new chief executive, announced a change to the year end and consequential dividend reduction, bought some businesses and flogged its retail arm for £2.51bn.
There are two schools of thought as to what happens next. The first sees S&N grow both organically and via acquisitions; the proceeds from the pubs sale have already reduced its debt, leaving S&N on a far stronger financial footing.
But the slimline S&N could also prove an attractive target itself. Budweiser owner Anheuser-Busch, the South African-US hybrid SABMiller and Heineken are all contenders, as is the spirits giant Diageo. (With growth in spirits restricted by competition concerns, the Guinness owner could well decide to expand in brewing instead.)
S&N was the worst performing stock in the FTSE 100 last year, and closed on Friday at 375.75p. But with the overhaul out of the way and debt paid down, 2004 could prove profitable, not just for S&N, but for punters too.
Marks & Spencer
Take a deep breath and take a punt on M&S; it's likely to be one hell of a ride. Buying retailer's shares was once as safe as choosing a Marks & Sparks shirt. But fashions have changed and M&S still hasn't fully recovered from the years of neglect that saw the retailer sink in the eyes of consumers and the City.
However, at 289.25p, M&S looks undervalued. Its shares have been going though a bit of a rough patch and, having reached just shy of 340p in July, it has been hammered by a talk of a faltering recovery and poor clothing sales over Christmas. There is probably some truth in the rumours, and punters should be warned that January and February could be particularly hairy.
Longer term, M&S looks solid. It's got a decent top management team, headed by chief executive Roger Holmes and chairman Luc Vandevelde. And 2004 will see new revenues coming though - notably from former Selfridges boss Vittorio Radice's homewears offering.
Since demerging from Kingfisher two years ago, Woolworths has had a less than happy relationship with the stock market. Investors have not been too impressed with a constant decline in margins, an apparent ability to disappoint and a general lack of inspiration. But Trevor Bish-Jones, Woolies' horse riding, Porsche-driving chief executive, is finally executing his margin improvement plan, which involves refurbishing the chain's high street stores and improving the out-of-town Big W concept. Christmas trading figures, due shortly, may not be en- couraging, but we should soon see some recovery at Woolworths. If not, expect something more dramatic, as chairman Gerald Corbett is not the sort of man to sit on his hands. A bid to take the group private is not beyond the realms of possibility, as Woolies has some superb high-street sites that would be attractive to other retailers. Buy at 44p.
Jonas plumps for Leeds Utd
Not deterred by the lacklustre performance of his 2003 share tip, the editor's two-year-old son grasped his crayon and returned to the FT prices page to chose a share for this year.
Being nearly 50 per cent older, Jonas Nissé brought his experience to bear before confidently putting his mark next to Leeds United. This is not only a risky tip, given Leeds' parlous financial situation, with administration still not out of the question, but also hardly popular in an Arsenal-supporting household.
However, Jonas could argue that a recovery on the football field now makes it less likely Leeds will be relegated, and the fact that two or three consortia are working on a rescue for the Premier League club augurs well for a financial rescue. The shares have already started showing some improvement, and at 5p are at twice their lowest price.Reuse content