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

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

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
and  

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

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Recruitment Genius: Claims Administrator

    £16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...

    Recruitment Genius: Senior SEO Executive

    £24000 - £28000 per annum: Recruitment Genius: A Senior SEO Executive is requi...

    Recruitment Genius: Online Customer Service Administrator

    £16000 - £18000 per annum: Recruitment Genius: An Online customer Service Admi...

    Recruitment Genius: Digital Marketing Executive

    £18000 - £22000 per annum: Recruitment Genius: This global, industry leading, ...

    Day In a Page

    'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

    Bread from heaven

    Dutch survivors thank RAF for World War II drop that saved millions
    Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

    How 'the Axe' helped Labour

    UK will be 'run for the wealthy and powerful' if Tories retain power
    Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

    The price to be paid for challenging the rule of extremists

    A revolution now 'consuming its own children'
    Welcome to the world of Megagames

    Welcome to the world of Megagames

    300 players take part in Watch the Skies! board game in London
    'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

    Charlotte Gainsbourg on 'Nymphomaniac'

    Starring in one of the most explicit films ever
    Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

    Robert Fisk in Abu Dhabi

    The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
    Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

    Vince Cable exclusive interview

    Charging fees for employment tribunals was 'a very bad move'
    Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

    Iwan Rheon is returning to his Welsh roots

    Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
    Russell Brand's interview with Ed Miliband has got everyone talking about The Trews

    Everyone is talking about The Trews

    Russell Brand's 'true news' videos attract millions of viewers. But today's 'Milibrand' interview introduced his resolutely amateurish style to a whole new crowd
    Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

    It's time for my close-up

    Meet the man who films great whites for a living
    Increasing numbers of homeless people in America keep their mobile phones on the streets

    Homeless people keep mobile phones

    A homeless person with a smartphone is a common sight in the US. And that's creating a network where the 'hobo' community can share information - and fight stigma - like never before
    'Queer saint' Peter Watson left his mark on British culture by bankrolling artworld giants

    'Queer saint' who bankrolled artworld giants

    British culture owes a huge debt to Peter Watson, says Michael Prodger
    Pushkin Prizes: Unusual exchange programme aims to bring countries together through culture

    Pushkin Prizes brings countries together

    Ten Scottish schoolchildren and their Russian peers attended a creative writing workshop in the Highlands this week
    14 best kids' hoodies

    14 best kids' hoodies

    Don't get caught out by that wind on the beach. Zip them up in a lightweight top to see them through summer to autumn
    Robert Fisk in Abu Dhabi: The acceptable face of the Emirates

    The acceptable face of the Emirates

    Has Abu Dhabi found a way to blend petrodollars with principles, asks Robert Fisk