Stocks to watch in September

Published by Jim Levi on 30 August 2011.
Last updated on 28 September 2011

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.


Interior Services Group is an AIM-listed minnow with a market capitalisation of just £67 million. But it is successfully striding across the global stage, with operations in Europe, the Middle East and Asia.

Its expertise lies in fitting out offices and retail space, as well as complete refurbishments and building development. It struggled through the recession pretty well and even kept dividends rising when profits dipped in 2010.

The latest trading statement at the beginning of July was encouraging. It currently has more than £760 million of work in its order book and £35 million in cash on the balance sheet (equivalent to more than half the group's entire market value).
Brokers expect profits of £12.2 million for 2010/11 and £13.1 million for this year.

What's more, the projected rise in the dividend produces a whacking yield of 8%.


One financial company with a stunning track record is Hargreaves Lansdown, a leading provider of investment management services to private investors.

On the latest count, it had £23.6 billion of assets under administration. In the five years to June 2010, it grew profits from a mere £7.6 million to £86.3 million - brushing aside the effects of the recession as if the crash wasn't happening and finding itself catapulted into the FTSE 100 index this year with a market value approaching £3 billion.


The next set of results is expected to reveal profits of £130.5 million, and the market is looking for £166 million in the current year. The dividend - just 3p a share in 2007 - is expected to be 20.44p in 2012.

The shares have more than doubled in value in the past year, but lately seem to be pausing for breath. Analysts are sharply divided on where they go from here. The track record suggests it is onward and upward, but the rating is a near-neutral 4.53. That's understandable, perhaps, as the forward earnings multiple is a demanding 23.9.


Magazine publisher and event organiser Centaur Media saw its shares trading above 150p in 2007 before the financial crisis hit.

However, the meltdown savaged advertising revenues for titles such as Marketing Week and The Lawyer, and in the space of two years, profits slumped from £16.9 million to just £1.7 million.

Lately, though, the company has been fighting back, and pre-tax returns for the year to June look like almost trebling to £6.24 million. The market forecast is for £8.58 million for the current year, as the management begins a reshuffle of operations with a view to cutting costs and streamlining operations ready for the next phase of expansion.

But the shares now sell at close to the year's low, reflecting disappointment that recovery hasn't been swifter. They begin to look cheap on a forward multiple of 10.9 and a prospective yield of 4.3%.


Coal of Africa is an Australian company with an AIM listing and four big coal mining projects in South Africa. The group is now gearing up for large-scale exports, and the City is hoping it has finally swung into profit in the year just ended.

The market expects pre-tax profits of £25 million. The target for the current year is £86 million.

In the 2008 stockmarket slump, Coal of Africa's shares plunged from more than 200p to under 50p, but they gradually climbed back to 150p last year.They have since fallen out of favour again to just 75p, where the five brokers who follow the shares all rate them a 'strong buy' in the belief that profits are finally starting to flow.

For brave speculators only.


Shares in K3 Business Technology Group have doubled in price this year in response to growing evidence that the pace of expansion at this specialist supplier of computer services to the supply chain industry is increasing.

The latest trading statement suggests recent acquisitions are bedding down very well and that more are on the way.

K3 already has a solid track record showing profits rising every year for the five years to 2009/10, from a lowly £233,000 to £4.77 million. For the year just ended, profits are expected to nearly double to £8.28 million, while in the current year the market is looking for around £9.8 million.

Such an outcome brings the prospective price/earnings multiple down to 7.9.