There's money in bricks and mortar

City Talk

Britain's house builders have spent the past five years knocked flat by the property recession and buyers' reluctance to contemplate a new frying pan, let alone a new house. But with the return of go-go 1980s conditions elsewhere in the economy, house builders are well placed to clean up in the second half of this year after an uncertain first half. According to the strategists at Societe General Strauss Turnbull, those poised for housing cheer include Barratt Developments (248p), Beazer Homes (179p) and Berkeley Group (553p). However, this does not apply to builders merchants, which SGST says will suffer from tough trading conditions into 1997. To that end, they recommend selling Wolseley (420p) and BPB (340p).

It's been a long hard slog for Cordiant to escape the shadow of its former masters, Maurice and Charles Saatchi, but it looks as though the sun is about to shine. The company's interim results on Tuesday are expected to show a return to profit and a possible restoration of the dividend on the back of key account wins like EDS and Kodak. At 108p, the shares look cheap.

THE DOUBLE gloom of the paper and speciality chemicals industries has knocked English China Clays (259p). Margin erosion in both sectors, plus aggressive competition, held 1995 profits at pounds 95m, below the high watermark of pounds 100m in 1992. At the heart of the problem is English China Clays' underperforming Calgon chemicals subsidiary, bought in 1993. The precipitous fall in the company's share price (see chart right) started shortly after the deal was completed. However, things are unlikely to get much worse, and at a yield of over 8 per cent, the shares are looking very cheap. Analysts believe a buyer may soon emerge for Calgon, or even for the whole company. Buy on bid prospects.

Upmarket Canadian lingerie retailer La Senza got a publicity overload (pictures of glamourous girls being a bit of a novelty on the financial pages) when it launched its AIM listing in May. Since then the shares have suffered: now standing at a frumpy 136p - 20p down on their first- day closing price. With the retail climate improving, predictions of pounds 2.3m profit in 1997-98 on turnover of pounds 43m now look conservative. Buy.

Insurance broker Willis Corroon is struggling to increase margins, but to no avail. Nikko Securities expects the company's first-half profits, unveiled on Thursday, to be pounds 67.5m, only marginally ahead of last year's pounds 66.3m. Willis Corroon has called in management consultants to look at the problem (a sure way of getting investors nervous), but with the current level of competition in the insurance market, analysts believe that there is little scope for increasing revenues or stemming the outflow of cash, predicted to be pounds 15m for the year. The shares have had quite a run in the last six months, from 123p in December up to a peak of 168p at the beginning of last month. Now they are on a downward curve again, and at 136p, look like they have further to fall. Sell.

The shenanigans over its bid for Grand Met that never was have left Guinness shares unloved in recent weeks. This has been exacerbated by the re-rating of drinks rival Allied Domecq, in light of the sale of its half share in Carlsberg-Tetley to Bass (expected this week). Of the two, Guinness's management look the better bet for future growth in the stagnant drinks sector, and they appear to be contemplating imaginative deals to achieve this. A long-term buy at 470p.

Not to be confused with the cigar for those who don't suc-ceed, Hamlet (94p) is a clothing and textiles distributor with a tasty sideline in supplying the Hard Rock Cafe and Planet Hollywood with their tourist-friendly T-shirts. The latter has come on in leaps and bounds since Hamlet won the contract last year, and accounts for most of the company's pounds 20m turnover increase to pounds 97m in 1995-96. Profits, up 10 per cent to pounds 6.7m, will begin to reflect these efforts next year. Buy.