Jump aboard the caravan express

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The Independent Online
QUEENSBOROUGH Holdings, the leisure vehicle of entrepreneurs Kevin Leech and Stuart Sim, of ML Laboratories fame, has embarked on an expansion programme that could well bear interesting fruit. New chief executive Philip Mason is already on the prowl in France for caravan parks to add to its caravan park operations in the UK. Expect news also of Noel Edmonds being signed as a guest celebrity at some caravan sites. The idea is to continue buying up small, independent caravan operators, while reducing management overheads through central accounting and purchasing. The company is also developing its visitor attractions, which include the Cheddar Gorge Cheese Company, and the Needles Pleasure Park on the Isle of Wight.

At 34p, the shares are yet to show much headway since a 50-for-1 consolidation last November. But patience should be a virtue in this instance: buy.

LEGAL & General may have risen 56 per cent in 1995, but the shares (669p) could have further to go. Stockbroker Salomon Brothers reckons the share price is at the bottom end of the valuation range for its dividend yield and embedded value - the actuarial calculation which assesses the real value of its outstanding policies. A safe blue chip buy, with the added attraction of being a potential takeover target.

DANKA Business Systems, overshadowed by more pressing concerns at Wickes, escaped some of the publicity this week, when it issued a first-quarter profits warning. The shares have fallen 245p to 468p, although analysts in the UK have only trimmed their forecasts. Analysts in the US, where most of the shares are traded, have slashed their 1996 figures by as much as 20 per cent. The discrepancy suggests there may be some uplift in the shares when the company announces its interim results. However, given that growth has been fuelled by an acquisition-driven rush - 50 in the past year alone - it is hardly surprising there will be hiccups along the way. At present, best avoided.

FURTHER developments at Epic Multimedia Group, where the company is expected to announce a deal with a major US distributor for its CD-Rom title, End Game. The distributor will pay for up-front funding to cover development costs, with Epic collecting royalties on sales. Epic is also sanguine about the effect of the Internet on its core business, and is working on various on-line products. Worth a punt at 76p.

ANOTHER attempt by a stockbroker to establish a model for developing the best valuation of a stock price, this time from Merrill Lynch. The Value Surprise Model attempts to pick out shares whose earnings are most likely to surprise the market, before the market cottons onto the fact. In other words, it is an effort to second-guess the market. However, Markus Barth warns that "analysts will not always be correct in forecasting company earnings". With that caveat in mind, the following FT-SE stocks most likely to spring a positive surprise are United Utilities (542p) and PowerGen (471p). Those most likely to surprise with negative news are British Sky Broadcasting (440p) and Argos (746p).

LAST week, we mentioned Carpetright, the company of carpet king Lord Harris, as a sell. This week comes news of the flotation of Allied Carpets, which is aiming for a pounds 200m price tag when it lists next month. The company has plans in a similar vein to Carpetright: rapid store expansion with pounds 9.3m of the proceeds used to purchase eight freeholds from Asda. Total proceeds are expected to be between pounds 140m and pounds 160m. An intermediaries offer for private investors will close on 17 July.

SHARES in Ashanti Goldfields, the Ghanaian goldminer, have been hit by disappointing interim results. Chief executive Sam Jonah may be keen to distance himself from Lonrho, which originally owned the company, along with the Ghanaian government. But production is set to grow rapidly and costs will come under control. A positive outlook for gold, and the shares, at pounds 131/32, look cheap compared with South African leaders. Buy.