Anglo American has lost its lustre

Not all that glisters is gold. Anglo American, the world's largest miner of precious metals, has been getting record breaking prices for its output of gold and platinum, not to mention for more mundane products such as nickel and copper, thanks to a boom in commodities prices. And yet, next week, the company will tell the City that profits in 2003 actually fell.

There are a few places you could lay the blame for this disappointing reality. One favourite is the central bank in South Africa, which is understandably more interested in tackling inflation than bolstering multi-national mining corporations' bottom lines. Relatively high interest rates have contributed to a big strengthening of the rand, up 40 per cent year-on-year against the dollar in the second half of 2003. More than a third of Anglo's assets are in South Africa, meaning that local costs have gone up relative to selling prices.

A case in point is Anglo Platinum (74 per cent owned by Anglo American) which yesterday said second-half profit fell 71 per cent, despite the platinum price in dollars hitting a record since 1981. Even though demand for the metal, used in catalytic converters to cut vehicle emissions, is likely to stay high, Anglo Platinum has had to curtail expansion plans that are now looking uneconomic, and as a result it has lots of unused, and expensive, smelting capacity.

Meanwhile, recent results show AngloGold, of which Anglo American owns 51 per cent, and De Beers, the diamond giant of which it owns 45 per cent, are making disappointing contributions to the parent company.

The group has probably the best collection of assets in the world at a time when economic activity is picking up and demand from China has contributed to falling stockpiles of a range of metals. Yet its shareholders are missing out, and it is possible that Anglo American's luck won't change before commodity prices start to top out. A forecast dividend yield of less than 2.5 per cent is no compensation, and the shares are to be avoided.

There's no need to log off at ITnet yet

Increasing numbers of local authorities outsource much of their IT support to the private sector, or call in outside firms to plan big computer system upgrades. ITnet is one of the smaller players chasing this business, but it has successfully kept group turnover growing, even while its other work outside the public sector almost dried up.

Last year, profit was £17.9m, up from £7.3m, on turnover that rose just 5 per cent. But the company was yesterday predicting a "step change" in revenue growth this year, as confidence returns across the board. Its services for the water industry (which is driven by regulators to always be chasing cost savings) and new contracts for National Air Traffic Services should lead to a more impressive year.

There should be new work for central government departments after a breakthrough contract with the Cabinet Office last year to help introduce ways for the public to interact with government departments online. Also, local authorities will be chasing ways to improve efficiency and improve customer satisfaction in order to avoid or justify council tax rises.

ITnet shares carry the risk of reputational damage to the company from occasional problems with contracts, which can spark horrible political slanging matches. But most of the time the company is operating in the very boring areas of IT support behind the scenes.

The stock, up 12.5p to 319.5p yesterday, trades at an unfair discount to its peers, but that seems rather to suggest that its peers are overvalued. On 19 times forecasts of this year's earnings, the shares are a hold.

This could still be a Stream worth dipping into

If Gordon Robson, the founder and chairman of Stream Group, had consulted one of his company's psychics in April 2001, before floating it at 28p a share, he might have thought twice about doing it.

Stream's stable business, offering horoscopes and psychic services over the phone, has not been a problem at all, but a telecoms business failed to take off and had to be scaled right back. The shares collapsed to barely tuppence as Mr Robson considered taking the company off the AIM market in a huff. But with cash in the bank and profits coming in, this is a worthy stock market investment.

Happily, the shares are back from the dead, in part thanks to the onward march of mobile telephone technology. Stream is concentrating its efforts now on supplying content for the new generation of handsets, including movie trailers, text message dating, ringtones and a fruit machine-style betting game. With phone operators keen to offer such services, and Stream itself advertising them under its new "Go! 82020" brand, there should be plenty of growth, and profit margins should trend up over time, especially if the gambling takes off and expansion into the US is successful.

The shares, up 0.75p to 38.5p yesterday, have already had an extraordinary run. With a flat year in prospect they are not screamingly cheap, on a price-earnings multiple of 19, but they are worth a punt.