Be wary of what Simon says

Simon Engineering suffered another up-and-down ride last week, as its shares jumped about in nervous trading. After earlier gains, it lost most of them, with the shares off 15 per cent on Friday alone, closing at 37.5p. Long-suffering shareholders, of course, will know the movements follow on the recent interim figures. Despite higher profits, the company remains financially stretched. It has promised to sell off its Access division in the US - a sales memorandum is being drawn up at present. But sceptics doubt a sale will fetch a reasonable price. If the sale fails to raise sufficient cash, Simon's stretched relationship with its bankers may become even more fraught. The shares are best avoided in the meantime.

Asda Property (152.5p) is one of the few property companies to have resisted the depredations of the slump in its markets, and consistently boost net asset value. Recent interims showed pre-tax profit ahead to pounds 5.1m (pounds 3.1m). A broad mix of properties, from Soho to Woking, gives it a good balance to minimise risk from any one sector. And if its nifty footwork in selling on property at a profit continues, it can defy the gloom for a little while longer. Buy.

Developments continue apace at Thames Water, which after some ill-fated diversification, cast out its chief executive, and restored a more focused approach. One result is a greater awareness of its investors. This should be no bad thing, and its interims at the end of October should unveil a more progressive dividend policy. The business is still cutting staff at an annual rate of 250, which produces savings of pounds 7m a year. With less chance of upsets, the shares, at 553.5p, are a safe hold.

Close Bros (340p), the merchant banking business that has come, seemingly from nowhere, to a market capitalisation of pounds 414m will post its full year figures tomorrow. The market expects another solid improvement, although it will be too soon to see much effect from the bank's takeover of Hill Samuel's corporate finance business. Close Brothers has taken on all 50 or so quoted clients of the former merchant bank. If Close Brothers can retain some of the Young Turks from HS, it may have the basis of a sound corporate finance business, established in record quick time, and in this case, other than on-going overheads, for minimal outlay.

Cairn Energy, a high flyer of late among the oil exploration and production sector, may be on the verge of having its wings clipped. Without a dividend to its name there is a limit to investors' patience. The company has some exceptionally promising assets in Bangladesh, and the involvement of Halliburton as a partner was a good move. But at current levels, the shares, 379p, are overcooked.

Logica, the UK's leading software consultancy and systems house, has a couple of problems affecting its customers which can only boost earnings. The curious problem of the year 2000 - and the lack of many mainframes to be able to handle dates starting with 20 - is one where the company has expertise aplenty. It also has a tie-in with an Indian software house, where code re-writing can be processed at much cheaper cost. The emergence of the Eurocurrency will also prove a boon. Even if Britain refuses to go the whole hog, most City banks will have to install accounting systems which recognise the Euro. Buy.