In the minutes after London won the Olympics last month, Balfour Beatty shares jumped 5 per cent. The company is one of the UK's most respected construction and civil engineering companies, and can be expected to benefit in the run-up to 2012.
Don't expect the company to get heavily involved in the building of the Olympic venues. Too many firms have come to grief with cost overruns on such grand projects. Instead, Balfour Beatty will target work on road widening and rail projects as the Games galvanise plans for improvements to the capital's transport infrastructure.
The opportunities for work in the UK stretch as far as Balfour Beatty can see. It already has £7.4bn of work in the pipeline, with two big, new schools and a £521m hospital in Birmingham among those coming through this year. But this week's interim figures were mixed, with disappointments on some projects in the US, and the shares fell - not helped by a warning about the outlook for rail infrastructure in the UK and Germany. Even so, a dividend rise should add to confidence. Long-term buy.
Companies are hiring again, which is good news for Michael Page International, the recruitment company that has reported a big rebound. Turnover was up 22 per cent for the first half, while operating profit shot 79 per cent higher at £30.6m. But while the company has a good brand name and its growth plans are sensible, a question mark remains over the economic recovery. The shares are, thus, a hold.
African Eagle Resources has unveiled promising results from exploratory drilling at a site in Tanzania. The company likes to differentiate itself from the clutch of other AIM-listed miners of its size by pointing out that it operates only in relatively stable African countries and that it is involved in more than one commodity. The company's shares are a punt, but this looks like a good one.
Raymarine designs and manufactures technological tools and devices for the leisure boating market - from 3D navigation systems to fish detectors. The company's first set of interim results as a publicly listed company showed a 26 per cent increase in first-half pre-tax profits. It is also looking at several acquisition opportunities. Buy.
Rok Property Solutions, a group of businesses in property development, housebuilding and odd-job work, has announced its fifth consecutive set of record figures, with profits up 13 per cent. The risk is a dispute with a former director, who is demanding £5m in the courts, but while margins rise over the next few years, the shares are worth it.
Shares in BPP, the professional training group, are up 60 per cent since we first tipped them in 2002, and 35 per cent on a year ago. The company has been in a recovery phase, after feeling the effects of the City downturn when the dotcom bubble burst. At 18 times earnings and a yield of 4 per cent, hold.
Amlin, Lloyd's underwriter, has defied our expectation during the past year, as its shares have continued to rise in spite of a tough market. But the dangers of the cycle remain, and though Amlin is one of the stronger Lloyd's insurers, there will surely be better times to buy.
Chaucer is another Lloyd's of London underwriter. It has been at the centre of a wave of unsuccessful merger and acquisition activity in the insurance sector over the past year, and there may be more action to come. With a dividend yield in excess of 4.5 per cent, and the shares trading at 6.3 times this year's predicted earnings, Chaucer is the best of the bunch for new investors looking for exposure to Lloyd's. Buy to tuck away.
It is Darwinism in the raw. Every year, 400 new bulls are auditioned by Genus, the animal breeding specialist, but only the most virile go on to father a new generation for the company. Genus has doubled profitability in five years and its shares have performed in line with that. We tipped them in November last year, since when they have risen 27 per cent. Hold.
Get used to the $60-a-barrel oil price, says Goldman Sachs. In which case those who want a bet on the oil price may be attracted to a new instrument. Oil Securities is a new contract based on the price of Brent crude, listed in US dollars. But while these contracts could be fun from time to time, with no dividend or interest, the stock looks no great investment now.
The above are recommendations taken from the daily Investment Column.
Dobson's track record looks to justify inflated share price
Michael Dobson, the chief executive of Schroders, has built an impressive reputation since taking the reins at the company almost four years ago. But while Schroders' investors are more than happy with their frontman's performance, there is a growing impatience to discover exactly when the group is going to use its spare cash.
But remember that across the existing business, investors have few complaints. Releasing its interim results, the group boasted a 43 per cent rise in underlying pre-tax profits, with gross margins improving significantly across the company.
New business levels also continue to grow rapidly, helped by the group's impressive investment performance, where 70 per cent of funds have outperformed their benchmark during the past three years. That has encouraged investors to put their money with Schroders instead of with its rivals.
The shares now trade at more than 20 times this year's predicted earnings, which looks steep, but the market value of the company is inflated by its surplus capital. Investors will not know for sure whether the valuation is justified until the money has been spent, but with Dobson's track record, the chances are that Schroders can and will justify its share price. Buy.Reuse content