The Week In Review: Profit potential in university graduates

The London stock market is carving itself a niche as a first-choice fund-raising centre for 'technology transfer' companies, outfits that exist to help universities and academics, companies and inventors to commercialise their innovations.

After a flurry of floats this year, there is now a cluster of about 10 of these companies, though not all look long-term winners. The theory is that academic institutions have a poor record of exploiting intellectual property, and there is a commercial opportunity in helping them. The technology transfer company's investors get access to a diverse range of new inventions. It's a numbers game, they say. Sooner or later, one of the technologies will turn out to be a blockbuster.

Except there is little evidence that the numbers stack up. The longer a technology transfer company has been around, the worse its track record appears to be. BTG and Generics, which both employ dozens of scientists to turn patents into products, are the classic examples.

One model that does look appealing is that of Utek Corporation, floated here in April but on Nasdaq since 2000. It has taken most of the risk out by allying itself not with inventors but with corporate product developers. It works on contract to them to scan the universities of the UK, Europe, Israel and North America for technologies they need for an urgent project, and typically makes a five-times mark-up on buying the technology and selling it on. Buy.

Mears Group

Investors who bought into Mears Group at its flotation have made their money 25 times over. Mears paints council houses, mends leaky taps, fixes broken windows or does a spot of rewiring. There is about £5bn of such work out there each year, and Mears has grown because more councils have brought in the private sector. Even so, this is not high-margin work, and should not command a sky-high stock market rating. Improved dividend and upgraded earnings forecasts this week will help, but the shares are too high.

Pinewood Shepperton

Sir Michael Grade, the chairman of the BBC governors, also chairs Pinewood Shepperton, the British film studios business that is desperate to attract more TV production work from programme makers such as, er, the BBC. This happy coincidence will help Pinewood, but it doesn't justify investing in this high-risk company. A year after a flotation aimed at paying down debt, Pinewood has had to agree a new overdraft to avoid breaching banking covenants. Sell.

Ark Therapeutics

To many in the City, Ark represents the last flotation for Old Biotech, gotten away after a big marketing push by its brokers in March 2004 but never having seen the issue price since. Most of the value in Ark, which is currently heavily loss making, lies in hopes for Cerepro, a live virus injected into the brain that seems to prolong the life of people who have had a tumour out. It could be on sale in Europe in 2007, but it is new science and risky. Ark has a long list of milestones it could pass in the coming months, all of which could move the shares up in the short term. But for the long term, sell


Whitbread shares have more than doubled over the past five years but looking at its latest trading statement it is hard to see why. Everything the group does is either at a standstill or going backwards with one exception - its Premier Travel Inn budget hotels. Put simply Whitbread is a conglomerate throwback and it needs to focus. A break-up is now the only thing that justifies a share price of 978p. Sell

Avis Europe

It all went wrong at once for Avis Europe, the hire car business. US visitors to the UK fell away after the 11 September attacks. The European economy has failed to manage anything other than sluggish growth and corporate customers have kept belts tight. Profits went downhill faster than a hire car with the handbrake off, and Avis was forced into a £110m rights issue this summer. Since then, there have been signs of improvement, but the shares already factor in a recovery and a little bid speculation. Avoid.


Axis-Shield's 2001 splurge on research and development looks like paying off. In both its diagnostics and laboratory divisions, it has new products about to come to market. Both are promising and we missed a trick by advising investors to hold off in 2003. Still, Axis-Shield is at a tricky inflexion point, back in the black but looking pricey given the modest profits expected while the new products are rolled out. With regret, still pass.

The above are recommendations taken from the daily Investment Column.

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

Arts and Entertainment
The cast of The Big Bang Theory in a still from the show
tvBig Bang Theory filming delayed by contract dispute over actors' pay
England celebrate a wicket for Moeen Ali
sportMoeen Ali stars with five wickets as Cook's men level India series
Morrissey pictured in 2013
peopleGuitarist, who played with Aerosmith, Lou Reed and Alice Cooper among others, was 71
Arts and Entertainment
High-flyer: Chris Pratt in 'Guardians of the Galaxy'
filmThe film is surprisingly witty, but could do with taking itself more seriously, says Geoffrey Macnab
Life and Style
food + drinkVegetarians enjoy food as much as anyone else, writes Susan Elkin
Life and Style
lifeDon't get caught up on climaxing
Life and Style
Arts and Entertainment
Harry Potter (Daniel Radcliffe), Hermione Granger (Emma Watson) and Ron Weasley (Rupert Grint)
newsBloomsbury unveils new covers for JK Rowling's wizarding series
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

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

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    1st Line Support Technician / Application Support

    £20000 - £24000 per annum: Harrington Starr: A leading provider of web based m...

    Team Secretary - (Client Development/Sales Team) - Wimbledon

    £28000 - £32000 per annum: Ashdown Group: Secretary (Sales Team Support) - Mat...

    Accountant / Assistant Management Accountant

    Competitive (DOE): Guru Careers: We are looking for an Assistant Management Ac...

    Senior Investment Accounting Change Manager

    £600 - £700 per day + competitive: Orgtel: Senior Investment Accounting Change...

    Day In a Page

    Save the tiger: The day America’s love of backyard tigers led to a horrific bloodbath

    The day America’s love of backyard tigers led to a horrific bloodbath

    With only six per cent of the US population of these amazing big cats held in zoos, the Zanesville incident in 2011 was inevitable
    Samuel Beckett's biographer reveals secrets of the writer's time as a French Resistance spy

    How Samuel Beckett became a French Resistance spy

    As this year's Samuel Beckett festival opens in Enniskillen, James Knowlson, recalls how the Irish writer risked his life for liberty and narrowly escaped capture by the Gestapo
    We will remember them: relatives still honour those who fought in the Great War

    We will remember them

    Relatives still honour those who fought in the Great War
    Star Wars Episode VII is being shot on film - and now Kodak is launching a last-ditch bid to keep celluloid alive

    Kodak's last-ditch bid to keep celluloid alive

    Director J J Abrams and a few digital refuseniks shoot movies on film. Simon Usborne wonders what the fuss is about
    Once stilted and melodramatic, Hollywood is giving acting in video games a makeover

    Acting in video games gets a makeover

    David Crookes meets two of the genre's most popular voices
    Could our smartphones soon be diagnosing diseases via Health Kit and Google Fit?

    Could smartphones soon be diagnosing diseases?

    Health Kit and Google Fit have been described as "the beginning of a health revolution"
    Ryanair has turned on the 'charm offensive' but can we learn to love the cut-price carrier again?

    Can we learn to love Ryanair again?

    Four recent travellers give their verdicts on the carrier's improved customer service
    Billionaire founder of Spanx launches range of jeans that offers

    Spanx launches range of jeans

    The jeans come in two styles, multiple cuts and three washes and will go on sale in the UK in October
    10 best over-ear headphones

    Aural pleasure: 10 best over-ear headphones

    Listen to your favourite tracks with this selection, offering everything from lambskin earmuffs to stainless steel
    Commonwealth Games 2014: David Millar ready to serve up gold for his beloved Scotland in the end

    Commonwealth Games

    David Millar ready to serve up gold for his beloved Scotland in the end
    UCI Mountain Bike World Cup 2014: Downhill all the way to the top for the Atherton siblings

    UCI Mountain Bike World Cup

    Downhill all the way to the top for the Atherton siblings
    Save the tiger: The animals bred for bones on China’s tiger farms

    The animals bred for bones on China’s tiger farms

    The big cats kept in captivity to perform for paying audiences and then, when dead, their bodies used to fortify wine
    A former custard factory, a Midlands bog and a Leeds cemetery all included in top 50 hidden spots in the UK

    A former custard factory, a Midlands bog and a Leeds cemetery

    Introducing the top 50 hidden spots in Britain
    Ebola epidemic: Plagued by fear

    Ebola epidemic: Plagued by fear

    How a disease that has claimed fewer than 2,000 victims in its history has earned a place in the darkest corner of the public's imagination
    Chris Pratt: From 'Parks and Recreation' to 'Guardians of the Galaxy'

    From 'Parks and Recreation' to 'Guardians of the Galaxy'

    He was homeless in Hawaii when he got his big break. Now the comic actor Chris Pratt is Hollywood's new favourite action star