The Week In Review: ARM best kept at length for now

At the height of the boom ARM Holdings was a FTSE 100 company and its shares traded at a couple of hundred times earnings. These days the semi-conductor designer is a FTSE 250 constituent and is valued at 24 times forecast earnings for 2007. Yet even this more modest valuation is too rich.

The 17 per cent rise in first-quarter revenues that ARM reported this week looked impressive but failed to meet analysts' forecasts. Only thanks to good cost control did the company manage to hit its earnings targets. It appears that ARM is finding it increasingly difficult to achieve its sales forecasts. In July it cut projected growth to 15-20 per cent from more than 20 per cent. Then in October it again guided down estimates to the lower end of that range.

ARM makes money by licensing its designs to semiconductor companies and by getting a royalty each time one of the consumer devices containing its designs hits the market.

Traditionally it has done well from mobile phones, 90 per cent of which contain at least one ARM product, and digital cameras, where the level stands at about 50 per cent.

In the future, ARM aims to have a more diverse range of consumer goods running on its microprocessors coupled with the penetration it enjoys in the mobile phone market.

But that will take some doing. In the meantime, its licensing revenues are disappointing. Best avoided.


The temporary office space group Regus has bought back 58 per cent of its UK business from Alchemy for £88m. The purchase marks the end of Regus' recovery, but a word of warning. Regus has very high operational gearing. So when times are good they are really good, and when they are bad, life is truly grim. At current levels, that makes the stock just a hold while at the first sign of an economic downturn it should be ditched.


The online advertising sector is booming. It is growing at between 20 and 30 per cent a year and analysts forecast this trend will continue for years to come. is among a handful of AIM-listed companies cashing in on this explosive growth. Buy.


4imprint designs and distributes promotional goods such as golf balls and coffee mugs with company logos on them. 4imprint does this in Europe and the US. It may not sound exciting , but it is highly profitable and cash-generative. For the year ending 31 December 2005, the group made a pre-tax profit of £6.7m. This is forecast to rise to £7.3m in 2006 and to £8.3m in 2007. Buy.


Clarity Commerce Solutions hopes to pay a dividend at about this time next year. The group provides software to the hospitality and leisure sectors that helps operators manage their tills and check the performance of all their outlets. In the year to 31 March 2006, sales increased 14 per cent to £18m, but we don't yet know exactly how much profit has been generated. Wait for further clarity before buying.


Anyone hoping to see M&C taken over by a larger hotel chain or carry out major asset disposals the way InterContinetal has done will be disappointed. M&C is 52 per cent owned by Kwek Leng Beng, its Singaporean chairman. Even so, on a long-term view, M&C offers good value. Its considerable freehold asset base underpins the company's value while management is doing a good job running the portfolio of 91 hotels. Hold.


Huntsworth, the international public relations group, is benefiting from all the deals being done in the City. It makes around 45 per cent of its sales from financial PR which sees the group earning juicy fees by spinning for the various parties involved. Trading at 12.5 times forward earnings, the shares offer good value. Buy.


European Goldfields has good news - its recently submitted business plans for the Skouries and Olympias projects have been endorsed by the Greek government. This development is a significant milestone for the company and validates its approach of working closely with both the government and local community. Buy.

Oil's well for shareholders who've struck black gold

Just as it looked as if things could not get any better at Soco International, the oil explorer put out a drilling statement this week saying its Vietnam prospect is likely to be even bigger than originally thought. The offshore project in the Cu Long Basin has become a serious asset for Soco, where two years ago the shares cost 320p. This week's news sent them soaring 87p to 1,317p.

In the oil business it is one thing to have a big reservoir of "black gold" but another to be able to get it out of the ground at a cost that allows the whole project to become commercially viable. It is on this point that Regal Petroleum came unstuck last year. But Soco will have no such problem. Its Te Giac Trang well in Vietnam boasts a flow rate of about 17,500 barrels of oil per day. That makes it a world-class well.

Soco shares will certainly lose ground should the company suffer a drilling disappointment at one of its sites. But on a long-term view, they look set to go higher. Hold.

The above recommendations are taken from the daily Investment Column.

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at

Ben Little, right, is a Labour supporter while Jonathan Rogers supports the Green Party
general election 2015
The 91st Hakone Ekiden Qualifier at Showa Kinen Park, Tokyo, 2014
Life and Style
Former helicopter pilot Major Tim Peake will become the first UK astronaut in space for over 20 years
food + drinkNothing but the best for British astronaut as chef Heston Blumenthal cooks up his rations
Kim Wilde began gardening in the 1990s when she moved to the countryside
peopleThe singer is leading an appeal for the charity Thrive, which uses the therapy of horticulture
Alexis Sanchez celebrates scoring a second for Arsenal against Reading
Life and Style
An easy-peel potato; Dave Hax has come up with an ingenious method in food preparation
voicesDave Hax's domestic tips are reminiscent of George Orwell's tea routine. The world might need revolution, but we like to sweat the small stuff, says DJ Taylor
Japan's population is projected to fall dramatically in the next 50 years (Wikimedia)
Life and Style
Buyers of secondhand cars are searching out shades last seen in cop show ‘The Sweeney’
motoringFlares and flounce are back on catwalks but a revival in ’70s car paintjobs was a stack-heeled step too far – until now
Finacial products from our partners
Property search
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...

    Ashdown Group: IT Manager / Development Manager - NW London - £58k + 15% bonus

    £50000 - £667000 per annum + excellent benefits : Ashdown Group: IT Manager / ...

    Recruitment Genius: Sales Consultant / Telemarketer - OTE £20,000

    £13000 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...

    Ashdown Group: Training Programme Manager - City, London

    £40000 - £45000 per annum + benefits : Ashdown Group: Training Programme Manag...

    Day In a Page

    NHS struggling to monitor the safety and efficacy of its services outsourced to private providers

    Who's monitoring the outsourced NHS services?

    A report finds that private firms are not being properly assessed for their quality of care
    Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

    Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

    The Tory MP said he did not want to stand again unless his party's manifesto ruled out a third runway. But he's doing so. Watch this space
    How do Greek voters feel about Syriza's backtracking on its anti-austerity pledge?

    How do Greeks feel about Syriza?

    Five voters from different backgrounds tell us what they expect from Syriza's charismatic leader Alexis Tsipras
    From Iraq to Libya and Syria: The wars that come back to haunt us

    The wars that come back to haunt us

    David Cameron should not escape blame for his role in conflicts that are still raging, argues Patrick Cockburn
    Sam Baker and Lauren Laverne: Too busy to surf? Head to The Pool

    Too busy to surf? Head to The Pool

    A new website is trying to declutter the internet to help busy women. Holly Williams meets the founders
    Heston Blumenthal to cook up a spice odyssey for British astronaut manning the International Space Station

    UK's Major Tum to blast off on a spice odyssey

    Nothing but the best for British astronaut as chef Heston Blumenthal cooks up his rations
    John Harrison's 'longitude' clock sets new record - 300 years on

    ‘Longitude’ clock sets new record - 300 years on

    Greenwich horologists celebrate as it keeps to within a second of real time over a 100-day test
    Fears in the US of being outgunned in the vital propaganda wars by Russia, China - and even Isis - have prompted a rethink on overseas broadcasters

    Let the propaganda wars begin - again

    'Accurate, objective, comprehensive': that was Voice of America's creed, but now its masters want it to promote US policy, reports Rupert Cornwell
    Why Japan's incredible long-distance runners will never win the London Marathon

    Japan's incredible long-distance runners

    Every year, Japanese long-distance runners post some of the world's fastest times – yet, come next weekend, not a single elite competitor from the country will be at the London Marathon
    Why does Tom Drury remain the greatest writer you've never heard of?

    Tom Drury: The quiet American

    His debut was considered one of the finest novels of the past 50 years, and he is every bit the equal of his contemporaries, Jonathan Franzen, Dave Eggers and David Foster Wallace
    You should judge a person by how they peel a potato

    You should judge a person by how they peel a potato

    Dave Hax's domestic tips are reminiscent of George Orwell's tea routine. The world might need revolution, but we like to sweat the small stuff, says DJ Taylor
    Beige is back: The drab car colours of the 1970s are proving popular again

    Beige to the future

    Flares and flounce are back on catwalks but a revival in ’70s car paintjobs was a stack-heeled step too far – until now
    Bill Granger recipes: Our chef's dishes highlight the delicate essence of fresh cheeses

    Bill Granger cooks with fresh cheeses

    More delicate on the palate, milder, fresh cheeses can also be kinder to the waistline
    Aston Villa vs Liverpool: 'This FA Cup run has been wonderful,' says veteran Shay Given

    Shay Given: 'This FA Cup run has been wonderful'

    The Villa keeper has been overlooked for a long time and has unhappy memories of the national stadium – but he is savouring his chance to play at Wembley
    Timeless drama of Championship race in league of its own - Michael Calvin

    Michael Calvin's Last Word

    Timeless drama of Championship race in league of its own