BUT there are a number of special situations among narrowly focused retailers. Typical is a long-time favourite, of Citytalk, T&S, the specialist chain of newsagents. Its virtues are highlighted by the 25 bids received by Gallaher for the very similar Forbuoys chain, and by the bigger-than- expected success of the National Lottery.
The shares have raced ahead to 168p from a low of 144p on recent encouraging results, and that was before the lottery bonanza started to roll. They remain good value. What other retailer can say that its only problem is coping with too many customers?
ANOTHER exception reporting this week is fashion retailer French Connection, which has risen a healthy 40p since the shares were recommended in Citytalk last November.
Since founder Stephen Marks sold his shares, the firm has become much less of a one-man band. John Richards, at NatWest Securities, forecasts a jump in earnings per share from 17.7p to 25.5p in the year to end-January 1995. The pace is clearly sustainable. As Mr Richards says: "The continued steady progress in both the UK and the US owes more to improving the quality of the product and efficiency of the business than to chasing sales in what remains a tough environment." A solid buy.
THE market has not yet woken up to the benefits from the weak pound for the upmarket mens- wear retailer and manufacturer, Austin Reed. The shares are still a mere 216p. The only bear factor is the mild winter, which hit sales of overcoats. But this is more than made up by increased sales to continental Europe. Better sales should flow through to profits, as the company has overhauled working practices that were more than a little old-fashioned. Still undervalued.
STRONG bulls of the contract- hire specialist TLS Range include broker Henry Cooke Lumsden.
The shares have more than doubled since they were first recommended in Citytalk back in mid-1993. But they are still good value: pre-tax profits soared in 1993/94 and are set to more than double in 1994/95, thanks to a more conservative accounting policy that deferred profits, to much better utilisation rates and to a rapidly increasing fleet of vehicles.
The broker is forecasting a rise from the present 47p to 60p - and that could be conservative, since the present price is a mere 6.3 times likely 1995 earnings. A good runner.
THERE is more to go for in Farnell Electronics, the high-flying electronics business after the £80m sale of its manufacturing arm at the end of March.
The new chief executive, Howard Poulson, is betting on the company by turning it into a world-scale distributor and removing extraneous businesses to fill his war chest. Even before the acceleration, brokers BZW were forecasting that pre-tax profits for the year to end-January will be up from £49.5m to £61m and that could be conservative.
Even at 593p, up from 512p in the last year, the shares remain good value.Reuse content