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Mid-to-small cap focused Bridgewell noted that FTSE-250 player Body Shop met expectations at the interim, but rates the shares ‘underweight’ on valuation and concerns about its product proposition. In contrast, Mothercare’s recovery story is intact and the shares are a buy. Although second quarter like-for-like figures at Mothercare fell 0.3 per cent – this was a creditable performance in a tough environment.

Analyst Chris Millington remains ‘overweight’ on housebuilder Bellway – ‘one of the best placed in the sector to deliver’ – after it posted full year figures to July in line with forecasts. Bellway is holding up in a tough market due to its strategy of strong forward sales and maintaining affordable average sales prices.

Elsewhere, Geoff Miller remains upbeat about property and casualty insurer and re-insurer Catlin (despite 2005 being a year of global natural disasters) following an update on losses incurred to date during the hurricane season. ‘This year’s hurricane losses are still an earnings (rather than a balance sheet) hit to Catlin,’ argues Miller, ‘and the company remains our favoured play in the sector.’ 2005 earnings forecasts for the mid-250 player, estimated to have lost a net $125 million from Katrina and $60 million from Rita, were clipped from 64.5p to 33.5p nonetheless. On the tech side, ex-reporter Carl Franklin reaffirmed his buy stance on techMARK-listed iSoft, which has appointed ex-BAE Systems chief executive John Weston as non-executive chairman. Franklin argues the shares trade at an unwarranted discount to UK
software peers.