The Week In Review: Dive in for dividends, in spite of the storms

First things first. This column should admit it likes fun, exciting holidays - trekking, canoeing, diving, that sort of thing. Just the sort of holidays that First Choice, the aptly named tour operator, likes too.

Not so the gods. They have not so much rained as poured natural disasters on the holiday company. What with tsunamis in south Asia and hurricanes in the US and Caribbean, it has been "one thing after another", according to Peter Long, the chief executive.

It speaks reams about the management's skill and the strength of its business model that such extreme natural disasters have not blown First Choice off its course to this year's double-digit earnings growth.

First Choice has made the specialist holiday market its own among mainstream operators, giving it plenty of scope to build on what it has already achieved.

It has spent £68m on buying niche travel businesses this year and has no plans to stop there. And it is cutting distribution costs by selling more trips online.

The main risk is that the consumer will go on strike, holidaying at home if at all. But this risk is outweighed by the management and its business model. On Panmure Gordon's upgraded 2006 forecasts, the shares trade on an 11.6 times profit/earnings ratio, which is not expensive. Buy.

LONMIN

Lonmin is the rump of Tiny Rowland's dismembered Lonrho empire, one of the three biggest miners of platinum. It is almost a year since cooling water leaked into a furnace at a smelter, putting it out of action for four months. And yet the company says production of platinum in the year to 30 September, at 916,420 ounces, had been only fractionally lower than last year.

While Lonmin is not a very diversified company, the share price, perhaps 16 times next year's earnings, includes takeover speculation. Hold.

EUROPEAN MOTORS

European Motor Holdings is one of the lesser known of quoted car dealers. And this year has been the second in a row in which UK new car sales have fallen. But the decline was predictable. In April 2004, we insisted that EMH shareholders should not take their profits yet. Keepo holding.

CARPETRIGHT

Someone deserves to get a carpeting. Managers at the UK's biggest floor-coverings retailer, Carpetright, decided a few months back to offer massive discounts to pep up sales. The strategy failed. The shares sit at the same level as in April, when we said avoid. That remains our advice.

XANSA

Xansa is a punt on the phenomenon of "offshoring". It has as many staff in India as in the UK. It will move more of its business east and the rise in profits ought to be the story of the next couple of years. Buy.

WESTBURY

Housebuilder Westbury performs poorly. It has reported a 26 per cent fall in interim profits. But its shares are among the most highly valued in the industry - maybe because it looks ripe for a takeover. Such deals are never guaranteed. Take the profits and sell.

BRAEMAR

Braemar Seascope is a shipping broker whose shares have bobbed up and down in these choppy waters. However, with good long-term expansion plans and a 5 per cent dividend yield for investors who feel seasick, this is a buy.

WOLFSON

If you have an iPod or or a PlayStation Portable, you are using a microchip from Wolfson Microelectronics. Its shares have been all over the place since the flotation in 2003. But with strong demand from portable device manufacturers, we're sticking by our tip. Buy.

BLACKS LEISURE

Blacks, which sells outdoor clothes , was hit by the fact that this summer was actually one of the driest in recent years. Like-for-like sales for the six months ending 31 August were down 4.8 per cent. The good news is that forecasters are predicting one of the coldest winters for years. Hold.

The drugs don't work

AstraZeneca is spending so little on research and development this year that it has been able to raise its profit forecasts not one, but twice in the space of three months.

It looks like a company in transition, but without a vision yet as to what it might turn into.

Cost cutting can only take it so far, and the City is looking beyond the drugs that drove sales in the latest results because copycat rivals are preparing for their launches in a couple of years.

We said hold at 2,290p in April but the risks are growing. Sell.

The above are recommendations from the daily Investment Column