The Week In Review: Housebuilders are hanging on: you should too

Taylor Woodrow and Westbury, two of the UK's big housebuilders, were singing from the same hymn-sheet this week - and it wasn't an up-tempo number.

The housing market has improved a little from the weakness at the end of last year, but it remains considerably harder to sell homes than it was a year ago. Both companies are increasingly having to offer incentives to nervous buyers.

Taylor Woodrow is by far the bigger of the pair. It is spread across the UK, and built 9,054 homes last year compared with Westbury's 4,361. Both companies had promised more and, partly as a result of these disappointments, neither company has the highest reputation in the City. Indeed, the pair are usually cited as the most likely candidates to be taken over.

Taylor Woodrow has the advantage of a substantial US housebuilding business, offering some protection should margins fall sharply this year in the UK. Westbury does not have this bonus, but its shares are among the cheapest in a dirt-cheap sector.

Both builders are urging investors to look through the short-term uncertainty and focus on the UK's chronic shortage of housing, and shareholders absolutely shouldn't sell out. Hold on for the long term, or for a takeover bid.

SURFCONTROL

The old market for e-mail and web filters looks well developed now, and SurfControl's sales growth has slowed. The question for investors is what the outlook for revenue growth is with the new, broader suite of products. It is a tough call, and caution should prevail. Avoid.

CARPETRIGHT

Carpetright controls about one quarter of the UK's £1.8bn-a-year floor-coverings market, but it's a market that has taken a sharp turn for the worse. The cooling of the housing market and of consumer spending has pulled a rug from under the shares. Avoid.

WPP

Have companies moved from cost-cutting mode to growth? WPP, the advertising giant, says that it has detected this shift. Advertising and other marketing efforts are one of the easiest expense items to cut. So, if WPP clients are looking again to grow the top line - partly by brand building and product promotion - the advertising groups should be in for a good time. Hold.

HARVEY NASH

Harvey Nash, the IT-recruitment specialist, has failed to reassure investors. The company is increasing spending on infrastructure and new outsourcing services but, while this should set the company up well for the longer term, it will cost an unexpected £1m this year. More significantly, UK business confidence has weakened, affecting Harvey Nash's consultancy division. Avoid.

YOUGOV

There could hardly be a more topical flotation than YouGov, the pollster founded in 2000. The company claims a good record on calling elections, but most of its revenues come from market research for companies. Its great asset is a panel of 89,000 paid internet respondents, who mirror the UK demographically. YouGov has sold itself as a growth story, but that is already reflected in the shares. High enough.

WYEVALE GARDENS

Wyevale Garden Centres, with 114 outlets across England and Wales, has had a stonking Easter, having made efforts to improve the look and feel of its centres and, as a result, stimulating its customers to buy more. A property and business strategy review has encouraged some hot money into shares, and there is plenty still to go for. Buy.

SCOTTY

Scotty is travelling at warp speed in the wrong direction. The German military- communications group merged with the disaster-prone videophones company Motion Media last year, but has already run out of cash and is issuing a steady drip-drip of shares to stay afloat. The Scotty product suite is wide and needs constant development. There is no reason to cling on.

ASTRAZENECA

AstraZeneca's sales are being powered by Seroquel, a drug for schizophrenia or manic- depression, Symbicourt for asthma, and Arimidex for breast cancer. The risks remain high, but AstraZeneca's efforts at cost-cutting proved a highlight in this week's results. Hold.

AVIVA

Aviva, the insurance giant that trades as Norwich Union in the UK, generates nearly 60 per cent of its life and pensions business from overseas, where it has struck up successful partnerships with Credit du Nord in France and UniCredito Italiano in Italy. On general insurance, its deal to buy RAC will create exciting opportunities. The yield is 4.6 per cent. Buy.

ANTOFAGASTA

For the third time in a month, we are selling a stock from The Independent's 2005 tips portfolio. Antofagasta, the Chilean copper miner, is down more than 20 per cent from its February peak, triggering our stop-loss. Antofagasta is likely to produce less copper in 2005 than last year, and the takeover that looks likely for this family company has not arrived in time to save it for our portfolio.

The above are recommendations from the daily Investment column

Bet on gambling laws to put shareholders in the money

British casino companies such as Rank, which runs the Grosvenor chain and Mecca bingo halls, recently faced the prospect of Las Vegas gaming companies bringing supersized gambling sheds to the UK. But following the pre-election political wash-up, only one super-casino will be allowed, so the competitive threat has all but vanished.

Rank warns not to expect any benefits from the new Gambling Act this year, but after that there could be big rewards. Election results providing, legislation will soon allow casino advertising for the first time and axe the 24-hour rule, which insists new customers must be a member for a day before they play. Slot-machines numbers can also now be doubled to 20. These changes will provide a huge boost for Rank, which already has strong brands in a world where gambling is becoming a mainstream leisure activity.

Rank's Hard Rock, the music-memorabilia café and merchandising chain, is also improving, with franchises opening in the US in hotel and casino developments.

The biggest uncertainty for Rank is its Deluxe business. But Deluxe Media, which makes VHS tapes and has struggled to adapt to the rise of DVDs, is up for sale, while Deluxe Film, the film processing unit, is being demerged. Hold on to the shares for the pay-out, the casino prospects and the hope of a Deluxe exit.