The Week In Review: Everything to play for at Umbro but worth a shot

For a company associated with the "beautiful game", Umbro has had a pretty ugly opening match on the London stock market. In fact, it is already one-nil to the City, which forced the sportswear and replica kits company to slash the price of its shares by one-third.

For a company associated with the "beautiful game", Umbro has had a pretty ugly opening match on the London stock market. In fact, it is already one-nil to the City, which forced the sportswear and replica kits company to slash the price of its shares by one-third.

Yet Peter McGuigan, the former Mansfield Town midfielder who is Umbro's chief executive, may yet get on the ball.

Sales of sportswear in the UK, Umbro's biggest market, have come off the boil, and the competition with Nike, Adidas et al is ferocious. But the latest England away kit, premiered at Euro 2004, has been a big hit. Next year sees a new home strip and, God willing, the World Cup in 2006. Umbro also makes replica kits for myriad other football teams whose products are increasingly finding demand across the globe, particularly in football-mad Asia.

The focus can now switch to other areas of the business, and in particular the need to design more trendy, expensive gear to freshen up the brand, and to develop more women's clothing. There is also a new US-wide distribution agreement for football boots and trainers with the mighty Foot Locker which will be lucrative.

The City was right to drive a hard bargain at flotation and now has a share with a prospective dividend yield of 3.5 per cent and reasonable growth prospects. It is worth a shot.

MFI FURNITURE

The latest crisis to have engulfed MFI Furniture is a public relations disaster as well as a whopping financial one. It is difficult to see customers flocking to the stores while there is the possibility the delivery van may turn up half empty. This is a company that is already trying to sell furniture at mid-market prices to a nation that thinks of it as a low-budget and faintly embarrassing brand. Anyone with profits ought to take them.

UK COAL

UK Coal is the symbolic legacy of Thatcherism: the rump of Britain's coal industry inside a private company, whose shares are of primary interest not to mining sector investors but to property speculators. The company's mines continue to show themselves barely economical, but it is sitting on 49,000 acres of land and is only starting to scratch the surface of what could be redeveloped. Take a punt.

YULE CATTO & CO

Chemicals produced by the Essex-based Yule Catto & Co go into products as wide ranging as surgical gloves, paints, perfumes and prescription drugs. It is a heady cocktail, and the company is suffering one of its periodic come-downs. Sales of one drug ingredient soared last year, but copycat competitors have eroded profits since then. The shares still look a touch expensive and, with raw materials prices moving against the company, it remains prudent to wait.

BRIXTON

As a long-term story there is lots going for Brixton, including the prospect of conversion to investment trust status when the Government and the property industry agree tax terms, and the development of Heathrow Terminal Five, around which it owns great swathes of industrial estate. Yet as Tim Wheeler, the chief executive, himself says, property valuations may have got ahead of themselves. Sell a few Brixton shares at this point.

WELLINGTON UNDERWRITING

The US hurricane season has been just bad enough to be good. After months when investors have fretted over falling insurance premiums, Wellington Underwriting's chief executive, Julian Avery, says that the relatively severe impact of Charley and Frances had scared people into paying higher premiums - without being so severe as to hinder the profitability of the insurance industry. Wellington shares are worth a look for the short to medium term investor.

TRAVIS PERKINS

Travis Perkins runs several chains of builders' supplies merchants, with 740 warehouses across the country catering for the jobbing builder and the (experienced) do-it-yourselfer. With 60 per cent of its business related to home improvements, and with rising interest rates likely to crimp consumer confidence, there is a risk that sales will be hit. The management has proved it can deliver growth through acquisition, but new investors need a dividend yield of more than the current 2 per cent to be tempted in. Hold.

STADIUM

Stadium Group makes plastic potties for Mothercare, but has done a good job of stopping its business going down the toilet. This UK plastics and electronics manufacturing group is riding the wave of outsourcing to low-cost Asia. Having slimmed down its UK factory base, it is now mainly a contract manufacturer and service provider to UK electronics makers that want to ship their products from China. Worth a punt.

IMI

There is progress across most parts of this sprawling engineering group, whose products include valves and pumps for industry, and drinks dispensers. It has pushed a lot of manufacturing out to Asia and has been able to invest in new products throughout the economic downturn. Management is confident in the outlook and has instigated the first dividend rise for four years. With a 4.4 per cent dividend yield, the shares are still good value.

BIOCOMPATIBLES INTERNATIONAL

Chemotherapy is a vicious, if vital, weapon in the fight against cancer, and the high doses often necessary can lead to side effects. Biocompatibles is one successful UK company with a potentially interesting new idea: coating tiny beads with the drugs and implanting them into the blood vessels around the tumour. The theory is that a lower dose will be needed if it is implanted directly, and the bead will block off the blood supply that feeds the tumour, too. Worth a punt.

SMG

SMG, owner of the two Scottish ITV licences, is a mini media conglomerate which also owns Virgin Radio and businesses in cinema advertising and billboards. Borrowings are now at manageable levels and most of its operations are recovering nicely. While SMG says that no part of the business is up for sale, neither the industry nor the City buy that. And having others covet your assets is not a bad position to be in. Buy.

Aegis adds a psychological touch to what's on offer

Because products from different companies are pretty much the same, it is the skill of a company's marketing message that may persuade a consumer to choose one toothpaste or beer over another.

This base fact means that marketing becomes inexorably a more sophisticated process, requiring a wider range of marketing services, such as in-store promotions and direct mail, rather than just the traditional placing of ads in papers and television.

Aegis offers clients the big advantage of independent advice. Unlike integrated rivals, it does not have in-house agencies that make ads. The company plans and buys advertising space on behalf of clients including Renault and Cadbury, and it is winning more and more new business.

Also, as clients need to come to an ever more complex understanding of consumer behaviour, Aegis can offer further help, for instance through its psychology research.

For a number of reasons, Aegis is better placed than bigger rivals to benefit from the recovery in advertising spending. It is growing fast, according to its chief executive Doug Flynn, because it does not mess around with big acquisitions. The alternative - small purchases and investment in its existing network - was shown to have paid off in the company's results this week.

In addition, Aegis is focused mainly on Europe, so as the advertising upturn takes hold here (it has lagged the United States and Asian recoveries), the company will benefit proportionately more than the big boys. Buy this one for the long term.

The above is a selection from the daily Investment Column