The Investment Column: Premium pork producer Cranswick back on form and worth biting into


Cranswick

Our view: Buy

Share price: 564.5p (+31p)

The TV chef Jamie Oliver reckons that Sainsbury's customers should buy the supermarket's fresh fruit, vegetables and all the other things that are good for you. Holders of shares in pork producer Cranswick, which supplies Sainsbury's with its "taste the difference" range, would urge customers to buy sausages.

After Cranswick issued an update yesterday, watchers reckon things are getting better for the group after it published what some analysts took to be a worrying trading statement earlier in the year. The firm was worried about its ability to pass on the increasing cost of commodities to its customers, but according to watchers at Panmure Gordon, things are now in better order. "Having disappointed the market with its Q3 trading update in January, today's announcement of the Q4 performance sees the company reporting continued strong sales," they say.

The company's chairman Martin Davey says that there is always a time lag associated with passing these costs on and the company has now managed to do that in its primary processed pork business.

Analysts at Shore Capital reckon that the problems were associated with a lack of "visibility", but that has now also been resolved. "Management has confirmed that the full-year performance will be in-line with market expectations, and hence we leave our 2008 and 2009 forecasts unchanged," they say.

Despite what turned out to be a temporary issue on costs being resolved, the company does face other problems. The firm is generally thought to be at the upper end of the pork market, which Mr Davey reckons will insulate it from the worst effects of any credit crisis-related downturn. He may well be right, but there is an alternative argument that suggests customers faced with the need to do a bit of financial belt-tightening may opt for ordinary sausages rather than the premium range.

The group also imports meats from Italy for its charcuterie range. As it buys in euros and sells in sterling, the exchange rate is like to make a £600,000 dent in profitability this year.

Cranswick is over its early year wobble when its share priced dropped from 769p on 31 January to 560p just five days later. Better sentiment will see the stock rise. Buy.

Akers Biosciences

Our view: Buy

Share price: 13.75p (+0.25p)

The last 12 months have been something of a revelation for Akers Biosciences. The AIM-listed group develops and makes diagnostics products, including alcohol breath-testing devices, which it sells to the US military.

By the group's own admission, until last year the scientists were in charge. "The firm was great at creating science," says Tom Nicolette, Akers' chief executive. "We had government FDA approvals in place and have had $60m of investment since 2002. It was a real commercial opportunity."

The firm's annual results published yesterday show that the group is making progress. Revenues were up to $5.5m, versus just over $1m in 2006, with loses cut to $2.4m from more than $10m the year before.

Much of the change has been down to the take up of two products that have now received their US patents. Each department of the US military now buys the firm's breathscan system, which shows soldiers if they are sufficiently sober to use weapons. Health workers are buying up the firm's system for detecting blood clotting among potential users of the drug Herperin, which is supposed to thin the blood, but in some cases has done precisely the opposite, leading to the deaths of patients.

Analysts at Arbuthnot recommend a "strong buy", suggesting that Akers' strategy of targeting "carefully chosen key markets where existing tests do not effectively fulfil clinical... requirements," is on fire. Investors should note that Arbuthnot is the group's house broker.

The company reckons its strategy of protecting its technology through patent is crucial and that it has already taken action to prevent competitors copying it.

Independent analysts reckon the fact that the US military has contracted with the group "is not bad at all", and that investors should be interested. The firm's share price has fallen steadily from 71.5p last May, and that's a worry, but also potentially gives investors the hope of a good run. Buy.

Charles Taylor Consulting

Our view: Buy

Share price: 268p (+4p)

In a world worried about the credit crisis, investors know they should be seeking steady, defensive stocks to stave off the worst of the crunch.

And they don't come much steadier than Charles Taylor Consulting, which has been providing services to the insurance industry, in one form or another, since the 19th century. In short, the group, which posted a record £13.6m profit yesterday, is involved in a number of industries, from offering consultancy and investment services to mutuals to taking on troubled insurance firms and realising their value.

The firm faces several risks that analysts point out. The weak dollar is a big problem given the amount of business the firm does in the United States. Watchers at Dresdner Kleinwort recommend investors "cut" the stock, saying that foreign exchange rates are bad enough for the bank to cut its target share price from 500p to 425p. Dresdner does point to the progress being made by the firm, which increased revenues by 3 per cent last year to £81.5m.

The group targets stable improvements and chief executive John Rowe points to the long-standing relationships it has with its clients as a reason to back the stock. Buy.

PROMOTED VIDEO
News
ebookA unique anthology of reporting and analysis of a crucial period of history
News
people
Life and Style
President Obama, one of the more enthusiastic users of the fist bump
science
Arts and Entertainment
Peter Griffin holds forth in The Simpsons Family Guy crossover episode
tv
Life and Style
Upright, everything’s all right (to a point): remaining on one’s feet has its health benefits – though in moderation
HealthIf sitting is bad for your health, what happens when you stay on your feet for a whole month?
News
Kristen Stewart and Rupert Sanders were pictured embracing in 2012
people
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Data Governance Manager (Solvency II) – Contract – Up to £450 daily rate, 6 month (may go Permanent)

£350 - £450 Per Day: Clearwater People Solutions Ltd: We are currently looking...

HR Business Analyst, Bristol, £350-400pd

£350 - £400 per day + competitive: Orgtel: My client, a leading bank, is curre...

Account Manager - (Product & Account Management, Marketing)

£26000 - £30000 per annum + Benefits: Ashdown Group: Account Manager - (Produc...

Training/Learning and Development Coordinator -London

£28000 - £32000 per annum: Ashdown Group: Training/Learning and Development Co...

Day In a Page

A new Russian revolution: Cracks start to appear in Putin’s Kremlin power bloc

A new Russian revolution

Cracks start to appear in Putin’s Kremlin power bloc
Eugene de Kock: Apartheid’s sadistic killer that his country cannot forgive

Apartheid’s sadistic killer that his country cannot forgive

The debate rages in South Africa over whether Eugene de Kock should ever be released from jail
Standing my ground: If sitting is bad for your health, what happens when you stay on your feet for a whole month?

Standing my ground

If sitting is bad for your health, what happens when you stay on your feet for a whole month?
Commonwealth Games 2014: Dai Greene prays for chance to rebuild after injury agony

Greene prays for chance to rebuild after injury agony

Welsh hurdler was World, European and Commonwealth champion, but then the injuries crept in
Israel-Gaza conflict: Secret report helps Israelis to hide facts

Patrick Cockburn: Secret report helps Israel to hide facts

The slickness of Israel's spokesmen is rooted in directions set down by pollster Frank Luntz
The man who dared to go on holiday

The man who dared to go on holiday

New York's mayor has taken a vacation - in a nation that has still to enforce paid leave, it caused quite a stir, reports Rupert Cornwell
Best comedians: How the professionals go about their funny business, from Sarah Millican to Marcus Brigstocke

Best comedians: How the professionals go about their funny business

For all those wanting to know how stand-ups keep standing, here are some of the best moments
The Guest List 2014: Forget the Man Booker longlist, Literary Editor Katy Guest offers her alternative picks

The Guest List 2014

Forget the Man Booker longlist, Literary Editor Katy Guest offers her alternative picks
Jokes on Hollywood: 'With comedy film audiences shrinking, it’s time to move on'

Jokes on Hollywood

With comedy film audiences shrinking, it’s time to move on
It's the best of British art... but not all is on display

It's the best of British art... but not all is on display

Voted for by the British public, the artworks on Art Everywhere posters may be the only place where they can be seen
Critic claims 'I was the inspiration for Blanche DuBois'

Critic claims 'I was the inspiration for Blanche DuBois'

Blanche Marvin reveals how Tennessee Williams used her name and an off-the-cuff remark to create an iconic character
Sometimes it's hard to be a literary novelist

Sometimes it's hard to be a literary novelist

Websites offering your ebooks for nothing is only the latest disrespect the modern writer is subjected to, says DJ Taylor
Edinburgh Fringe 2014: The comedy highlights, from Bridget Christie to Jack Dee

Edinburgh Fringe 2014

The comedy highlights, from Bridget Christie to Jack Dee
Dame Jenny Abramsky: 'We have to rethink. If not, museums and parks will close'

Dame Jenny Abramsky: 'We have to rethink. If not, museums and parks will close'

The woman stepping down as chair of the Heritage Lottery Fund is worried