The sight of Wall Street sliding to new lows is hardly conducive to positive thought and you may want to wait for the smoke to clear before taking a stab at this week's recommendations, writes Peter Shearlock. The nice thing, however, is that both of them have the cash backing to keep you sleeping well at night S

Rag trade business Frank Usher (listed under 'household goods and textiles') finally announced on Friday that it had got shot of all its operating businesses, plus its big property in Hendon, north London, in a deal worth £6.9 million. I first tipped the shares in Growth Company Investor Weekly Digest on talk of just such a deal back in February. They were then 93.5p. Today, they are 88.5p (up from 81.5p last Friday), and they are a 'must buy' for any portfolio which has room for a shell play.

The price achieved for the old business and the Hendon property looks disappointing. But the numbers for what remains are nonetheless compelling. At the current price, Usher is capitalised at £5.4 million. After the deal is completed, the company will have about £5 million in net cash. So there is next to no premium involved. That marks Usher (which will change its name to Avingtrans) apart from many other shell situations, which typically trade at premiums of 50 to 100 per cent over their cash holdings.

The deal has been done by chairman Jeremy Hamer. But behind the scenes is the lurking presence of shell specialist Nigel Wray, who holds 12 per cent directly and a further 6 per cent through his Singer & Friedlander merchant bank. Wray will doubtless have some ideas of what to put into Usher in due course.

The other big cash play of the moment is Emess. Having parted company with its founder/chairman/chief executive Michael Meyer in August, and got rid of all but a couple of smallish businesses, Emess (the old Emess Lighting) is now casting around for a new identity. With £41 million of net cash in the balance sheet, and the remaining businesses clearly profitable, it can take its time hunting for what chief executive Nigel Singer says will be 'innovative businesses which we can acquire on realistic earnings multiples'.

Emess used to be one of Europe's leading lighting manufacturers, selling to most of the top ten retailers. But it got itself heavily into debt. Disposing of businesses - and raising some money through a preference issue - brought the debt down sharply in 1999. This year, most of the rest of the businesses have gone. What remains turned over £13 million in the first half of this year and produced a profit of £100,000. More is to come in the second half, which is traditionally the better half.

Emess shares slumber at 30p, which puts a value of about £32 million on the company. After deducting the value of the preference shares, net cash works out at approximately 35.5p per share. The continuing businesses are probably worth another 10p a share, which should cover the outstanding tax liability on the disposal profits and some litigation with one of the purchasers.

Last year, the company received a bid approach from its 29 per cent shareholder, Colmar Investment Holdings. There is another (unconnected) holding of a similar size. It is hard to see any downside from the current level. Buy and tuck away.

It is a delight to see Walker Greenbank coming clean about the approaches it has had. Having tipped the shares in the Digest for a management buy-out bid back in July at 32.5p, they are now 38.5p. The current market capitalisation of £24 million is less than six months' sales. I know the business made an operating loss at the six months stage, but I can't see it being sold for less than 50p a share.

Peter is editor of the weekly e-mail newsletter Weekly Digest