The Week In Review

This swallow risks crash-landing
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The Independent Online

Michael Page International

That cliché about one swallow not making a summer was being repeated a lot yesterday by Terry Benson, the chief executive of the recruitment group Michael Page International this week. Investors, though, are excitable ornithologists. And so it was that, after one set of strong results, Michael Page's overheated shares soared again in anticipation of a rebound in the UK recruitment market.

So what about this swallow? Trading in May and June was stronger than anticipated, with sales and marketing staff in particular demand. And the chances of summer? The sectors most affected by the downturn - the City and the professional services such as management consultancy and accountancy - are still tough. It will be months before the outlook clears.

Michael Page's shares were floated at 175p in 2001, just after the peak of bubble in the finance industry. The group will not easily make that year's £62m profit again. With the shares already back up above 150p, they are simply too expensive. Sell.

Domnick Hunter

Domnick Hunter is an engineering stock on the up, continuing steady progress, not simply rebounding out of the doldrums like so many of its peers. The company makes highly specialist filtration and purification systems, and there is excitement over a nuclear, biological and chemical filter system the company has devised for tanks. Hold.


Mentmore is a company that has lived by the adage, if at first you don't succeed, try something different. It is now focused on two divisions, document storage and its Spaces Personal Storage business. The latter division has 52 giant sheds in the UK and Paris but they are not even two-thirds full. Steer clear for now.


Yell, which owns Talking Pages and as well as the Yellow Pages in Britain and YellowBook in the US, looks neither fish nor fowl. It is not an income stock, since the predicted dividend would yield just 2.5 per cent at the present share price. And is it really a growth stock? The directories business is in decline thanks to the growth of direct mail and the internet. Unattractive.

Weir Group

The Glasgow-based manufacturer of pumps and valves hopes its links with US contractors will land it business in Iraq. It is also talking up the prospect of orders in the US power-generation market, which woke up to the need fors. The shares are fair value.


Brixton called the turn in the commercial property market this week, saying a rise in lettings activity indicated the market was over the worst of the slowdown. The group concentrates on industrial warehouse property, principally at Heathrow airport and in the Thames Valley corridor. Hold.


The Ofex market is a zoo for exotic investment opportunities, football clubs, family-dominated companies and speculative ventures of various degrees of spivviness. Ofex plc, the loss-making company that runs the market, has floated on its rival AIM and is something of a wild investment. New investors could be getting in right at the bottom of the market.


Headlam is a distribution business, the middle man between carpet manufacturers and small independent retailers who do battle against the might of Allied Carpets and Carpetright. Headlam may be floored by a consumer downturn in the short term, but it has a strong track record and its shares yield a 4 per cent dividend. Hold.

Minorplanet Systems

Minorplanet has gone from a standing start six years ago to one of the UK's leading telematics companies, whose technology allows companies to track their cars, vans and lorries. As the group works through new accounting policies and puzzles over its future, there is no hurry to buy, although investors should track its progress. Shareholders should hang on for the ride.

Edinburgh Oil & Gas

Edinburgh Oil & Gas has been awarded key licences in the Buzzard oil field in the North Sea. The estimated reserves are 468 million barrels, with Edinburgh Oil & Gas's stake at 5 per cent. The bulk of the rest is held by Canadian company EnCana and BG, which may buy Edinburgh out. Worth drilling into.

Allied Domecq

Shares in Allied Domecq, maker of Beefeater Gin, looked on the cheap side at their nadir in March, with the prospect of improved news from the company later this year and a change in sentiment towards Allied's wine business. Allied is a strong generator of cash, which provides a good underpinning for its 3.5 per cent dividend yield, but the valuation now looks full.


Cattles' historic business of door-to-door lending now accounts for less than a fifth of profits and the company is lending instead for "luxuries" such as cars and home improvements, with most customers paying by direct debit. Its new customers are just the type to cut back if consumer confidence dips, unemployment rises or tax rises start to bite. Avoid.

The above is a selection of recommendations from this week's daily investment columns

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