The Week In Review: Check out facts before you leave this hotel group

Half-year numbers from InterContinental Hotels were good and bid speculation means that the shares have risen; operating profit for the first half came in at £111m, while pre-tax profits came in at £104m on the back of a 12 per cent jump in revenue to £442m.

Despite a very solid set of numbers, shares in InterContinental are far from cheap. The takeover premium in the price means that the stock is trading on a racy 22.8 times forecast 2007 earnings, falling to 19.2 times in 2008. For now, the results are just about good enough to warrant holding on. Hold.

Kingfisher
Over the past five years, shares in DIY retailer Kingfisher have been among the worst performers in the blue-chip index. Since April they've been down almost 23 per cent. That said, first-half group sales were up by more than 7 per cent, and international sales rose by 22.8 per cent. Hold.

SMG
SMG's near 20 per cent gain in its share price in recent weeks was all but wiped out after last week's 13 per cent collapse. SMG has unveiled a major restructuring of the business to focus on its core television and production divisions and is moving in the right direction, but investors should resist buying. Hold.

Management Consulting Group
The group reported excellent interim numbers last week. Overall, first-half revenues rose 49 per cent to £100.5m, with pre-tax earnings up by 55 per cent to £10.2m. Even taking into account last week's strong rebound, the shares trade on just 7.3 times forecast 2008 earnings – far too cheap for a growth stock. Buy.

WH Smith
The poor summer weather looks to have had a big impact on WH Smith's competitors, and analysts expect full-year results to come out at the top end of forecasts. The shares trade on under 13 times forecast 2008 earnings. While there are concerns over the long-term future of some parts of the business, management's sought to bring in new revenue streams. Buy.

Celtic Resources
Severstal, the Russian steel giant, has taken a 22 per cent strategic stake in AIM-listed Celtic Resources' business, which could lead to a full takeover approach. Celtic trades on an attractive 12.3 times forecast 2007 earnings. This is a high-risk investment, but the shares are worth a punt. Risk buy.

Britvic
Britvic got regulatory clearance to buy C&C's Irish soft drinks business last week. However, the core UK market has delivered disappointing sales in the past three months. But the company still expects to make its full-year expectations. The stock trades on 14.5 times forecast 2007 earnings, falling to approximately 12.2 times 2008. For now, the stock looks fairly valued. Hold.

Smurfit Kappa
Last week's interim numbers for box maker Smurfit Kappa showed a 28.4 per cent jump in pre-tax earnings to ¿514m, indicating healthy margins. Deutsche Bank is forecasting ¿2.32 of earnings in 2008, putting the stock on a forward multiple of just 6.8 times. This is an excellent set of interim results. Buy.

Border & Southern Petroleum
B&S listed in 2005 and last week confirmed it has raised £15m of capital. The proceeds will be used to accumulate 3D seismic data on its prospects south of the Falklands. However, the long-term lack of progress on Falklands oil must make this is a stock to avoid. Reluctantly, this is a sell. Sell.

British Energy
The markets were braced for disappointing first quarter numbers from British Energy, so despite last week's 40 per cent drop in operating profits to £168m, most observers viewed the results positively. Citigroup is forecasting 36.5p of per share earnings for 2008, putting the stock on a forward multiple of 11.9 times – not expensive, but given the operational disappointments of the last year, a fair price. Hold.

Northern Rock
This year has been the worst for Northern Rock since the former building society demutualised 10 years ago. No one really knows how the credit market squeeze will unfold, but if conditions stabilise in a few months, conditions could ease for Northern Rock. With the appropriate health warning that the market is in uncharted waters, the stock may start to look cheap. Hold.

Climate Exchange
Climate Exchange is the holding company for two carbon exchanges. The shares have been listed since September 2003, and have gone ballistic in the last year. But remember, this is a business in relative infancy. No one ever went bust taking a profit. Sell.

a.dewson@independent.co.uk

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