Investment: The Week in Review - Rock Is a Hard Place

By Foley, Stephen | The Independent (London, England), February 2, 2002 | Go to article overview
Save to active project

Investment: The Week in Review - Rock Is a Hard Place

Foley, Stephen, The Independent (London, England)


Aircraft are flying less frequently with fewer passengers. That has lengthened the time between maintenance checks, a staple revenue for Rolls- Royce. As it secures new maintenance deals, investors should remember it is the customer, rather than the company, that is likely to have dictated the terms. Some 1,3000 planes are still out of service, mothballed in various deserts around the world. It is very hard to see any upswing in profitable orders to make engines for new jets. A dividend yield of 5 per cent offers some degree of protection amid the uncertainties, but Rolls-Royce shares are likely to drift south.

Old Mutual

Old Mutual is the largest financial services group in South Africa. Its businesses there are slick operations, and the company's dominance means opportunities for growth are scant. With 80 per cent of profits coming from the country, it will be impossible for Old Mutual to hedge against the faltering rand. The depreciation of the currency also poses problems for South Africa's attack on inflation which, if not brought under control, could make consumers increasingly unwilling to save, hitting Old Mutual's new business figures in its core market. Avoid.

Games Workshop

With customers hooked on its famous Warhammer series, Games Workshop's profits are back on an impressive trajectory. The recovery from an earlier sales wobble in the UK - effected by making shops more welcoming to war- games fans - should give confidence that the directors know what they are playing at. Analysts are instructed not to get carried away with talk that the new Lord of the Rings game could become the biggest thing in the toybox, but investors have already chased the shares high enough.

ML Laboratories

ML Labs has proved a disastrous stock market investment, but the chairman Kevin Leech is at least apologetic. He is days away from finishing his year-long search to improve shareholder value and, as well as putting the For Sale sign on a swath of assets, is on the verge of a deal to merge ML's respiratory drug development business with another group. The hope is this will crystallise the portfolio's value higher than the present ML share price. The stock could be lucrative for short-term gamblers.

Parthus Technologies

The Dublin-based designer of microchips for mobile phones is feeling the pinch. Many of Parthus's recent licensing deals have been agreed on less favourable terms than usual. It warned of a weak first half, but repeated its intention to become profitable in the second half. Meeting that goal will depend on an upturn in the electronics market. Fortunately, Parthus still has a $123.3m cash pile, and licence agreements with some of the world's biggest names in electronics. The shares remain high-risk.

Marlborough Stirling

Marlborough Stirling specialises in software and outsourcing for providers of investment products, life assurance and mortgages. With sales of life cover and home loans booming, financial services firms have turned to the company for help satisfying demand. Marlborough Stirling has avoided the profit warnings spewing from the other tech firms, yet its shares are cheap relative to the software sector. But there was no news on trading since New Year or on the outlook for 2002 when the company updated the market this week. Investors should hold back until a clearer picture emerges at March's annual results.

Manganese Bronze

A deal to produce the TX1 black cab in China rescued the taxi designer Manganese Bronze last month, but its components business has had a tough time, due mainly to a single unprofitable contract. Zingo, a project to develop technology for hailing your nearest taxi from a mobile phone, has had delays. Analysts expect only a tiny profit before costs associated with Zingo this year, so now could be a good time to lock in profits.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
Loading One moment ...
Project items
Cite this article

Cited article

Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited article

Investment: The Week in Review - Rock Is a Hard Place


Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

While we understand printed pages are helpful to our users, this limitation is necessary to help protect our publishers' copyrighted material and prevent its unlawful distribution. We are sorry for any inconvenience.
Full screen

matching results for page

Cited passage

Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.

Are you sure you want to delete this highlight?