The Week In Review: Building conglomerate loses ground

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For the three months to the end of March, Tomkins' operating margin fell to 8.6 per cent from 9.1 per cent a year ago. As a result, cashflows also disappointed.

Management blamed one-off disruptions for this and promised margins would soon recover. But a sizeable chunk of Tomkins' business comes from selling parts - belts, hoses and windscreen wipers - to the car makers General Motors and Ford. Both are trying to slash supplier costs.

In the meantime, raw material prices continue to soar and the US housing market, which accounts for 35 per cent of Tomkins' sales, is cooling. With these risks, the shares are fairly priced.

NUMIS

In the broiling arena of smaller companies' stockbroking, Numis has entrenched its position at the vanguard. Under Oliver Hemsley, the chief executive, Numis turned in a stellar performance over the first six months of the year. Pre-tax profits soared by 51 per cent to £18.6m, allowing for the interim dividend to be doubled to 1.25p a share.Buy.

TTP COMMS

Shares in TTP Communications surged almost 15 per cent this week after the mobile phone software developer secured a $23m (£12.5m) extension to its contract with Analog Devices, its longest-serving customer. But while this represents progress, TTP could also do with signing up customers for its third-generation mobile phone systems. Until there is evidence of progress the stock is best avoided.

INTERSERVE

Had Interserve not pounced on fellow facilities management operator MacLellan this week there is a fair chance the group itself would have ended up being bought by a larger player. At a glance the tie-up certainly makes sense for both companies. Interserve will acquire MacLellan for £116m in a cash and shares deal. But investors must not forget that Interserve has a sizeable pension fund deficit. For now, just a hold.

OXFORD BIOMEDICA

Oxford BioMedica shares have ticked higher after a mildly positive piece of news about the biotech's RetinoStat product. But the company still needs a partner to finance phase III trials of its lead product, the cancer drug TroVax and there are no guarantees. Given that OXB loses around £10m every year, its £150m market value looks too rich. Avoid.

UNILEVER

Unilever has announced that the disposal of its frozen foods division is on track. But the consumer goods giant must be careful. Today private equity may be content just to pick up crumbs from Unilever's table but if it does not get its act together a consortium could return with a bid for the whole company. The shares trade at a discount to peers such as Cadbury Schweppes and Danone. Either management will carry out the necessary measures to reduce the discount or a private equity bid will. Buy.

BLACKS LEISURE

"Camping is cool again." So says Russell Hardy, the chief executive of Blacks Leisure, which is riding a wave of enthusiasm for the outdoor life. As the country's biggest retailer of paraphernalia associated with the great outdoors, the group is well placed in a niche market. Its markets are tipped to grow by 5 per cent per year for the next five years. Full-year numbers released this week show pre-tax profits rose 5 per cent to £21.4m. Buy.

DEBT FREE DIRECT

Debt Free Direct stock has hit a record high thanks to yet another bullish trading statement from the debt specialist. It said that this year's full-year results would meet expectations and that profits in 2007 would top forecasts by 20 per cent. It is not surprising that business is booming at Debt Free Direct. The group administers individual voluntary arrangements, an increasingly popular halfway house for consumers who have too much debt but want to avoid bankruptcy. As the UK struggles under £1.1 trillion of consumer debt, buy.

Aberdeen Asset Management continues unlikely recovery

Aberdeen Asset Management has been one of the decade's most remarkable City turnaround stories. Two years ago, few investors would have gone near it - unable to see past the recent split-capital investment trust débâcle.

However, it survived - for which its founder and chief executive Martin Gilbert can take credit. And when the FSA finally settled with the industry over split-caps in December 2004, the damage was not as bad as feared.

Aberdeen has not looked back since. Within months, it had splashed out £265m on Deutsche Asset Management. Institutional new business has since started to rocket.

Since we first tipped Aberdeen 13 months ago, its shares have risen by more than 130 per cent. Over the past two years they have increased almost fivefold.

Aberdeen's valuation is now beginning to look a little stretched. However, as yesterday's first-half figures show, margins are still increasing and its strong momentum shows no sign of easing up. Buy.

m.jivkov@independent.co.uk

These recommendations are taken from the daily Investment Column.

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