The Week In Review: Festivities have only just begun

Don't write off all those retail companies which put in a miserable festive performance. Matalan and Marks & Spencer paid the price for uninspiring clothing ranges with plunging sales. Yet, if M&S actually takes its failings on board - and the signs are good - its shares look a bargain. And it is unfair to judge Matalan's newish management team on buying decisions made by the last lot.

Don't write off all those retail companies which put in a miserable festive performance. Matalan and Marks & Spencer paid the price for uninspiring clothing ranges with plunging sales. Yet, if M&S actually takes its failings on board - and the signs are good - its shares look a bargain. And it is unfair to judge Matalan's newish management team on buying decisions made by the last lot.

Brown & Jackson, the Poundstretcher owner, also got it wrong, but the sell-off in B&J shares is another buying opportunity, as is the dip in GUS's share price that followed its admission that sales growth at Argos had at last slowed down. The catalogue store's cheap-but-cheerful image will prove a draw when we are watching our cash. And GUS's do-it-yourself chain, Homebase, is benefiting from the group's undeniable retail flair.

Of the specialist retailers, HMV shares stand out on valuation grounds.

Which leaves the supermarket sub-sector, arguably in the best shape of the lot. J Sainsbury may have some way to go with its recovery, but turnaround potential made it one of two retail picks in this paper's 10 stocks for the year (along with furniture store Courts).

Aviva

It's been a tough year or so for Aviva, the insurer which owns Norwich Union. Customers, seeing their savings ravaged by the stock market, have kept their money under the mattress. But the group has boosted its market share and, unlike its deadly rival Standard Life, says it has no problems passing the regulator's new solvency test. Consumers are coming back to invest. The ageing population and the shift to private pension provision do give life insurers sound long-term prospects. A solid bet.

Sanctuary

Sanctuary Group takes a holistic approach to the music industry, rather than following the traditional business model of releasing CDs and DVDs, and raking in royalties from artists' back catalogues. It also acts as manager, tour organiser and merchandising promoter. The shares should be a big hit for long-term investors.

Ebookers

The online travel agent Ebookers is not a recent start-up - it was founded in 1983, and has a high street presence as well as its internet sales. The company's brands include Flightbookers and Travelbag, and it concentrates on long and mid-haul flights and tours. It is clearly taking a share of the revival in travel now under way. But rivals such as Expedia, Travelocity and Opodo look to be building strong brands that could threaten Ebookers' position. Only for the very brave.

Blacks Leisure

Blacks Leisure, the outdoor clothing group which owns Millets, has cornered just 15 per cent of the outdoor clothing market, so there is plenty of scope for new store openings. In addition, its "boardwear" chains cater to the growing popularity of surfing, skateboarding and, particularly, snowboarding. Hold.

Bespak

Bespak, the medical devices manufacturer, makes tens of millions of Diskus inhalers for GlaxoSmithKline's giant-selling asthma drugs, but the world's number two pharmaceuticals group squished Bespak's profits last year by demanding a whopping price cut. The plan to replace the income with work for Pfizer's new inhaled insulin product, Exubera, has failed because Exubera is delayed in last-minute trials. So there have been big job cuts instead. Investors should keep their eyes open for Pfizer's filing for regulatory approval of Exubera, when Bespak shares could become interesting again.

GW Pharmaceuticals

Geoffrey Guy, the chairman of GW Pharmaceuticals, says his company has a "pitch and two putts" approach to getting its drug, Sativex, on the market. Regulators may not initially approve the cannabis-based painkiller for all the neurological problems Dr Guy hopes, but he'll keep amassing the trial data and gradually extend its acceptable use. GW could soar if approval is forthcoming, of course, and it will always be a fun punt, but it is not yet one for the serious investor.

Morgan Crucible

Morgan Crucible is one of the UK market's most diverse engineering groups, making products for a variety of industries. As such it is a pretty good proxy for the global economy. A second wave of restructuring aims to restore the company's pre-downturn fortunes but buyers of the expensive shares are betting that global trade will pick up more quickly than the current consensus view suggests.

Zi Medical

The teeny tiny technology developer's market value tripled thanks to the launch this month of its first product, a device that checks hospital drips are working properly. The admission that Zi is considering a discounted fund-raising suggests the company is now overvalued, although it has a good pedigree. Speculators who have missed out should take the opportunity to climb aboard if a fund-raising is announced at a price significantly below the prevailing share price.

Luminar

It is hard to be really bullish about nightclubs as a long-term investment. This is still an industry with significant overcapacity. Relaxed licensing laws have meant there are more late-night bars competing for drinkers who used to be forced to the local club. Luminar - the UK's biggest quoted nightclub owner - is slimming down and planning a move into casinos. The stock is still cheap but the long-term challenges suggest that it is only a hold.