Motor components are in the midst of a turnaround. That enabled Avon to replace Nissan business with orders from Rover and Ford.
'The stock offers fantastic long-term potential,' Panmure's Harry Phillips enthuses. 'Avon has strong positions in all its niche-product areas.'
The broker expects half- year profits up from pounds 5m to pounds 5.5m, with a dividend rise from 5p to 5.2p. That should lead to year's profits up from pounds 11m to pounds 13.5m, putting the shares on a prospective p/e ratio of 21.
RESIST the temptation to chase the shares of Yates Brothers' Wine Lodges which, as we predicted last month, is upgrading from the Stock Exchange's unofficial 535.2 market to a full listing.
Only a limited number of Yates shares are available through the 535.2 matched- bargain arrangement, and any sellers will be looking for a generous price ahead of the listing. Better to wait until the nationwide chain of pubs makes its full debut, when an attractive price is likely to be set.
KWIK SAVE'S shares have suffered along with those of its less price-conscious rivals as the market has realised that price wars will be the norm in the food-retailing business for the foreseeable future. Tony MacNeary of NatWest Securities forecasts that pre-tax profits for the six months to the end of February, to be announced on Tuesday, will be up only pounds 3m to pounds 63m. Although the shares rose 23p last week, ending at 575p, they are still below the year's 656p high. This is unfair: Kwik Save still has plenty of room for expansion and its good name and experience of price wars give it pole position in the great food race. Stick with it.
IT LOOKS like a snip. Indeed, Klearfold is one of the bargains of the year: a business growing at 40 per cent a year, based on a patented hold on a rapidly expanding market for folding transparent PVC cartons, selling at a prospective p/e of under 8 at its Friday close of 107p. The shares are tightly held, Klearfold operates in the United States and is quoted here only because the management took over a shell company a few years ago. But Klearfold is about to appoint an English broker to persuade local investors of its charms - which will increase over the next few years as the current exaggerated tax charge returns to normal.
WATCH out for Royal Bank of Scotland to bump up its dividend by as much as 25 per cent when it reports on Wednesday. Word is that this rate of upgrade is on the cards for the next two years, taking the present 3.4 per cent yield at 400p up to 5.3 per cent - better than interest on some deposit accounts. Buy.
AS Whitegate Leisure, the renamed Northern Leisure was one of the classic 1980s boom 'n' bust shares; it went up to 230p in 1989, only to tumble to a low of 4.5p three years later. The cause: overexpansion into nursing homes and a disastrous foray into French discos. After a restructuring that handed three million shares to the banks Northern has been reborn, quoted on the main market and gone back to market leisure, primarily bowling alleys in the North of England. The market has sniffed improvement with the disposal of the nursing home business and has marked the shares up 5p on the week to 50p. But they remain one of the best recovery plays in the sector.
PRIDE may be about to come before a fall at the contract publisher Harrington Kilbride. Last year the market swallowed a pounds 1m placing of the shares at 219p, but they have since come off the boil to 150p. This puts them on a mere 15 times earnings, superficially reasonable for a group that showed 1993 earnings up a healthy 31 per cent. But since the year-end Harrington has lost its biggest single contract, for BAA, which was apparently unhappy at the firm's telephone hard-sell techniques. This disenchantment could be dangerous. Steer clear.