The Week In Review: Superior returns from a very bullish sort of company

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The recent images of Rebecca Loos, famous for her alleged affair with David Beckham, pleasuring a pig on television, have made the business of animal semen collection a hot topic.

The recent images of Rebecca Loos, famous for her alleged affair with David Beckham, pleasuring a pig on television, have made the business of animal semen collection a hot topic.

Genus is a leader in the field, mating specially-selected sires and bulls to produce superior offspring. Their sperm is frozen and shipped to farmers, who use it to improve their own herd.

This year's biggest stud is Picston Shottle, who is pleasured, albeit by a machine, about 200,000 times a year. Announcing yesterday that half-year profits were up 35 per cent to £4.4m, Genus said Picston's supplies had sold out until April 2005.

Bovine semen prices have stabilised this year after a period plagued by BSE fears in North America. Genus is also improving its animal pharmaceuticals division, which accounts for nearly half its turnover. Instead of low-margin, high-volume sales to other wholesalers, it is building more direct relationships with vets.

The shares are held back by its shareholder base - an enormous 26,000 individuals. Most are inactive, having inherited shares from Genus's origins as a co-operative. But the company is promising buy-backs to thin out its shareholder numbers, and so with the semen market bucking up, roll up your sleeves and get stuck in. Buy.

LAND SECURITIES

Since equity markets bottomed out in March last year, shares in the property company Land Securities have almost doubled. It has benefited from a turnaround in the office rental market and an increased demand for property investment across the board. The sector as a whole has also been buoyed by speculation over the positive effects that the Government's proposed Real Estate Investment Trust scheme may have on the profits of property companies. With the stock trading at one of the lowest price-to-earnings ratios in the sector, and boasting one of the highest dividends, it remains a buy.

AGGREKO

Few British companies operate in tougher markets than Aggreko, the temporary power supplier. But it does so rather well. The extraordinarily bad weather in the US this year meant disruption to power supplies from hurricanes and ice storms, so it has traded well there. Its European reorganisation should bear fruit shortly and it is actively seeking to grow its business in emerging economies. The stock is a cautious buy.

NORTHERN FOODS

On the same day that the Government announced measures to tackle obesity, Northern Foods, which produces, among other things, 100 million pizzas and 200 million pork pies a year, promised shareholders it would "get fit" as a company. It is to close two factories to keep costs low. Northern is struggling because over 80 per cent of its turnover comes from supplying ready meals and other goodies to supermarkets, who are squeezing suppliers harder than ever amid intense price competition. Avoid.

BRAMBLES INDUSTRIES

Brambles, through its Chep subsidiary, is the world's largest supplier of pallets (more than 200 million of them), used for transporting consumer goods. Clients include practically every well-known retailer, from Wal-Mart to Tesco. Chep is a rental business, charging clients for the amount of time they are using their pallets, which in most cases is all the time. This is now a well-managed business with scope to grow the dividend. Keep buying.

AMLIN

While many thought insurance rates had reached a peak by the spring of this year, the savage hurricane season ensured that premiums will maintain their high levels into next year. In spite of this, Amlin's shares have continued to drift. A fall in premium rates is inevitable. Shares in underwriters such as Amlin are not going to soar at this point in the cycle and new investors should stay away.

WILLIAM RANSOM

William Ransom is the UK's oldest pharmaceutical company, specialising in botanical ingredients. The recent purchase of Health Perception, a business started by the former Olympic swimmer David Wilkie, has helped boost profits and added to a product range that already includes nappy-rash ointments, elderflower extract and muscle rubs. Management believes sales could grow fivefold by 2008, but the shares are not for the faint-hearted.

CREST NICHOLSON

There is concern about a slowdown in the housing market, but with a dramatic and rapid rise in interest rates still unlikely, the fundamentals of the industry remain strong. There is a shortage of housing, and Government targets for new builds will keep housebuilders busy. Crest Nicholson has moved towards social housing which, although cheaper on a per unit basis, brings in cash payments from housing associations during the build. Keep buying.

SAB MILLER

The battle for the low carb beer market in the US has turned quite nasty, with advertising campaigns turned in to all-out slanging matches between Budweiser and SABMiller's Miller Lite. The reason is that Miller Lite's sales are improving,contributing to the 80 per cent increase in half-year pre-tax profits to $1.2bn. Increased investment in other Miller brands as well as rising energy and materials costs will hit profits. Too expensive.

HILTON

The success of Arsenal and Chelsea in the Premiership this season is annoying bookies, particularly Hilton, the hotelier and owner of Ladbrokes. The hotel sector is also still to fully recover, but Hilton is selling 11, worth as much as £100m. It is planning to combine its hotel and betting strengths in a super-casino, but it may well not get Government permission to build. With takings from newly installed fixed odds betting terminals in betting shops now level, the shares are reasonably valued. Hold.

BOC

Inhaling figures from BOC, the industrial gas supplier, might have had investors feeling a little high. But are the shares likely to deflate? A 133 per cent rise in fourth quarter pre-tax profits were attributed to a recovery in the global economy. The company faces 9,500 lawsuits in the US from steelworkers and is exposed to a weak dollar. But the downsides have been hedged and more than £1bn is going into growth projects. A long-term buy.

Burberry sales are no joke

Burberry may be the butt of every chav-related joke around (that's the gold jewellery-wearing, Burberry baseball-capped fraternity if you've yet to visit chavscum.co.uk). But that hasn't held it back.

The luxury goods group, spun out of GUS two years ago, has generated so much spare cash that it has decided to give £250m back to shareholders over the next 15 months, and start a policy of expanding the dividend.

Burberry's designs are as coveted as ever, thanks to the commercial nous of its top designer, Christopher Bailey. It pioneered the current penchant for mini-capes and was equally quick off the mark with ponchos.

One of Burberry's big attractions is that when one part of its fashion empire underperforms, another tends to make up for it.

So even though current retail sales are "subdued" (it blames the warm autumnal weather in the US, its biggest market), wholesale orders from the likes of Selfridges and Bloomingdale's are flooding in. Burberry has real problems only in the UK, where it won't spell out whether this is due to the chav association that is damaging its brand or a lack of big-spending overseas visitors. Luckily it is finding markets on the Continent and in Asia to compensate. Demand in one Hong Kong store (from Chinese tourists) is so strong it has to replenish its shelves every hour.

We have been fans of the stock since it floated, but the shares look high enough now. Hold.

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