The Investment Column: Strength in growing markets can keep SABMiller fizzing

Our view: Buy

Share price: 1120p (+16p)

A spokesman for SABMiller, the brewer, reckons that anyone suggesting that the company's performance in the first three months of this year was a surprise is "smoking something".

The company postedjust 1 per cent growthduring this period, but said that this was due to "phenomenal growth" in the same period last year, making comparisons difficult, and events beyond the group's control; the travel chaos during Chinese new year and the severe electricity shortages suffered in South Africa.

In fairness to the company, most watchers accept this explanation. Analysts were upbeat on the stock, saying that the firm has successfully managed to pass on most of the extra input costs caused by growing commodity prices.

SABMiller has interests in a number of emerging markets, particularly South Africa, where the group makes about 25 per cent of its money, China and Latin America, all of which have suffered some sort of bad news in the past few months. This, analysts say, is why the group's stock has fallen from 1439p a share on 3 January to where it is today, a fact that the company reckons undervalues the group by as much as 20 per cent against its peers.

South Africa remains a risk to the company. While SABMiller insists that the electricity outages that blighted its fourth-quarter figures are resolved, it does accept that the country's infrastructure does need to be improved.

While the group is insulated somewhat from the global financial crisis by its emerging market exposure, it also does lots of its business in Europe and US, which has been particularly worrying for the company in the past 12 months.

Dresdner Kleinwort reckons that concerns over the global economy do not outweigh the group's growth potential for the rest of the year. Investors that follow suit are likely to be raising a toast. Buy.

Manganese Bronze

Our view: Hold for now

Share price: 460p (-15p)

This year will be make-or-break for the manufacturers of London's iconic Hackney carriages, although it has nothing to do with sales to cabbies in the capital. The company is midway through a joint venture with the Chinese car maker Geely, which is "weeks away" from producing its first prototype for a cab for the Chinese market. According to the group's chief executive, John Russell, sales of the new car have already started, with agreements for about 500 signed.

The Coventry-based company has hitherto relied on the London market, and reported 17-month figures to December 2007 yesterday, showing operating profit of £5.6m. The odd reporting period is such because the group has changed its financial year to coincide with the Chinese, making comparisons tricky.

The company was certainly boosted by demand for its environmentally friendlier TX4, especially in March, a strong month for sales. However, March aside, the start of 2008 in London has, as Mr Russell describes it, been "volatile".

Many taxi drivers are self-employed and must be loath to splash out on a new cab when London is at the epicentre of the economic downturn; companies are coming down heavier on staff expenses, and individuals tightening their belts are more likely to take the Tube or a bus.

By Mr Russell's own admission, Manganese Bronze is not a short-term bet, especially with the group's present dependence on the City of London. But the company is setting a lot of store by its Chinese adventure, and for those happy to sit on their stock for the longer term, Manganese Bronze might just turn out to be a decent punt. Hold for now.

Peel Hotels

Our view: Hold

Share price: 165p (+3p)

If anyone has stayed in Dunfermline, the chances are they stayed at Peel Hotels' King Malcolm residence. That could be said to be the group's specialisation; upmarket four-star hotels in slightly offbeat, or as they would put it, provincial, locations.

The company concentrates on business travellers, with each of its hotels offering conferencing facilities and little in the way of a tourist trade during the working week. The benefit for investors is that business people need to meet to discuss how bad things are, as much as they need to meet to congratulate themselves, but Peel's chairman, Robert Peel, admits that the economic downturn is a worry, saying that food inflation is causing particular concern.

Mr Peel counters that, however, by saying thatthe provinces are not yet feeling the pinch that isaffecting London and other big cities.

The company has a history of paying pretty decent dividends. As part of its annual results published yesterday, which showed a surge in pre-tax profits to £9.6m from £1.5m the year before, the group is paying a special dividend of 15p a share after selling a plot of land near Bradford.

Buyers should be wary of the sector, and now is probably not the time to punt given the economy, but the group is worth watching. Hold.