The things a builder has to do to sell a house these days: cash discounts, part- exchange, throwing in fixtures and fittings, and even, according to Bellway, new carpets and curtains, too.
But, while Bellway warns investors not to expect a repeat of the level of growth reported in its latest annual results, the future looks safe as houses for the industry, and for Bellway in particular. The average price of a Bellway home is just £164,000 and half are sold for less than £150,000. Its operations are split 50-50 between north and south.
Above all, there is a housing shortage in the UK. This is the incontrovertible fact that should help investors in the building sector sleep.
It also means that the sector is grossly undervalued. Bellway, in particular, trades at barely six times annual earnings. With such solid foundations, buy.
Wise readers who took our advice to buy Sage, the FTSE 100 software group, a year ago when the shares were 172p are looking clever. The investment has grown a healthy 27 per cent and there is more to come, thanks to Sage's strong cash balances. Buy.
ST JAMES'S PLACE
Britain's worsening pensions crisis is a blessing for St James's Place Capital, the upmarket wealth management group. It can look with confidence to the future as pensions business is surging ahead of government reforms next year. Hold.
WHITTARD OF CHELSEA
Whittard of Chelsea, the tea and coffee retailer, brewed up excitement in July this year when it revealed that it was at the centre of a bid battle. Then London was bombed and the collapse in sales scared its bidders away. The group has not had a good year, with two profits warnings since January. Sell.
While wind power is now a growing part of the renewable energy mix, wave power is so far untapped. AIM-listed Ocean Power Technologies is trying to commercialise this energy and is making good progress. Buy.
Consumer debt levels remain at an all-time high - one way for investors to benefit is to back the new debt advice companies that specialise in 'individual voluntary arrangements'. Accuma floated in March, having raised £4.1m to fund marketing. Buy.
Simon Brickles, who led the successful Alternative Investment Market until 2003, has been drafted in to work the same magic at Ofex, another junior market. Now renamed Plus Markets, the shares exchange is going places again. Buy.
Oxford BioMedica is conducting trials of what could be revolutionary treatments for cancer. Its latest results for TroVax, OXB's most advanced drug, are positive, but a bigger trial is needed. It seems increasingly likely that larger commercial partners may want more data or an improved version of the drug before signing. Sell.
QXL Ricardo operates similar auction sites to ebay, and is finally making a profit. However, returns are meagre and a legal dispute in Poland is making life difficult. Take profits.
Colt Telecom specialises in the business market, but while the stock will always be a punt on future M&A activity, most investors should avoid.
The chief executive of BHP Billiton is basking in praise - another record year for sales, for profits and for dividends. The big picture is of emerging economies sucking in more commodities. BHP has cash coming out its ears - share buybacks or higher dividends could follow. Buy.
New man from the Pru is sitting pretty for the future
The former Lloyd's of London chief executive Nick Prettejohn is replacing Mark Wood, who is leaving Prudential after missing the top job when Jonathan Bloomer, the former group chief executive, was ousted earlier this year. The new UK boss is the first senior hire by Mark Tucker, who took over as chief executive in May.
Prettejohn may be pleasantly surprised by the contents of his in-tray - the insurer is in pretty good shape.
In a country in which an ageing population is forced to save more by a Government keen to trim its social security budget, the financial services sector must be a long-term winner, and the Pru's performance is improving.
The Pru is among our portfolio of tips for 2005 and the shares are up 7 per cent since the start of the year. There is more to come. Buy.
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