Yet, even though Thames is the biggest and arguably most efficient of the water companies, at 514p the shares yield more than any other in the sector apart from South West Water. A quality long-term buy.
BUY Tomorrows Leisure, the troubled theme park and sports centre operator, and the housebuilder Wiggins Group on the back of the deal the pair are hatching.
TL's chairman, John Sanderson, is set to announce a pounds 10m rights issue and the pounds 2m acquisition of a Lincolnshire property from Wiggins, in which the inveterate investor Jim Slater has emerged with a small stake.
This will give TL a fourth profit centre, after Pleasure Island, in Liverpool, a golfing and sports centre in Ilford, Essex, and a four-star Darlington hotel. TL will convert the Lincoln property into leisure use, possibly including a hotel at a later stage.
The cash element in that transaction is also good news for Wiggins, which will reduce its gearing to only 20 per cent of the equity. And it is taking enough TL shares to give it almost a 30 per cent stake.
'I only have a trivial holding in Wiggins,' said Mr Slater, 'but I have met the management and it seems to offer good value.' Both companies are worth following.
CITY FILE'S spies hear that Wilshaw, the international metal basher, is on the verge of a trio of exciting international deals, including a closer relationship with the much bigger T&N engineering group. These could take the shares over 100p. If Wilshaw's earnings per share rise from 2.4p to 3.4p this year, as brokers James Capel and Greig Middleton expect, then at 59p the p/e drops to a more reasonable 16 - even before those deals start rolling in.
IN THE midst of the spate of recent new issue flops, the broker Credit Lyonnais Laing has persuaded Beacon Investment Trust and a clutch of other institutions to back the highly speculative Voss Net on to the Stock Exchange's Rule 4.2 market. Voss Net does not yet have a single sale, let alone a profit, so its placing price of 119p is a leap in the dark. But its product - an electronic system to swap commercial information, apparently ideal for fast- changing markets such as airline seats and fresh food - is being tried out by two potential buyers in live tests with customers.
The operation is so highly geared that a huge chunk of sales will flow through to the bottom line. Worth a punt - but only for the brave.
ANOTHER new issue that could break the trend is TLG, the Thorn Lighting Group hived off from Thorn EMI last year. Richard Dyett of Henderson Crosthwaite is bullish because the company has not yet obtained full benefit from the reorganisation and factory concentration begun in 1991. Also, market share is increasing, especially in fast-growing product areas such as emergency and architectural lighting. He reckons that the prospective p/e in 1995 on the issue price of 115p could be a mere 12.5.
THIS may be the time to call the turn on Iceland Group, the freezer food retailer that has expanded into a wider range of supermarket trolley-fillers. The end of inflation and a step- jump in consumer tastes sent Iceland shares nosediving from March last year to a low of 132p this June.
The company is still freezer-based but has adroitly broadened its appeal, positioning itself above Kwik Save but below the likes of Tesco and J Sainsbury. Although the shares are 30p off the bottom they still yield a tasty 3 per cent and give good value up to 200p.
BM GROUP, the engineering conglomerate mess, has acquired a fan club since it revealed a final kitchen sink set of accounts last week, leaving a net loss of pounds 63.4m. As Sandy Morris at NatWest Securities said: 'The current management has proved its credentials by delivering on the commitments made 12 months ago,' - albeit through disposals at fire-sale prices. Mr Morris estimates that profits from continuing businesses in what will be renamed Brunel Group could deliver earnings of 6.5p per share in the current year, an undemanding p/e of less than seven. Could be a bargain.