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Stocking up shares for 2001

Companies: INT    LGT    PRM    TCT   
01/12/2000

Which shares would you like as a present from Father Christmas? Each GCI team member tells you what's on their Christmas present list

Peering into the future is a popular pastime at this time of year. But it can be fraught with perils - unless you take some sound advice.

One prediction can be made with certainty: 2001 will bring a bagful of surprises, welcome and distressing.

Undeterred, Growth Company Investor's intrepid team each reveal the share they would like to receive in their 2000 Christmas stocking. As the year unfolds, we shall review their progress, identifying those which should be kept and those whose sell by date has been reached.

William Davidson - Lighthouse to shine in 2001

I should like to wake up on Christmas morning with a sock full of Aim-listed Lighthouse shares at my feet. The recently floated independent financial advisory services company has started with fairly modest beginnings, but could tap into a rapidly growing market. The area of providing financial advice is about to change, as the traditional selling technique of agents being tied to one provider is replaced by the independent financial adviser (IFA). As these salesmen and women move across into IFA-land, Lighthouse provides them with support services to help them maximise their revenue - and Lighthouse's commission. Targeting rich individuals as well as taking business from solicitors and accountants - who will soon have to be regulated themselves or pass the work onto IFAs - should prove to be a lucrative business.

Share price: 180p

Market cap: £22.5 million

52-week High: 180p

52-week Low: 180p

Robert Tyerman - Healthy chances for diagnosis group

Aim-listed Proteome Sciences could prove a profitable New Year's gamble. The biotech company has developed a test for the deadly Creuzfeldt-Jakob Disease, which it claims is ready for marketing.

Chief executive Christopher Pearce reckons Proteome, which develops proteome-based platform technologies for diagnosis, has 'two diagnostic tests, for CJD and strokes, ready for immediate commercialisation'. If the CJD diagnosis works out, the implications for Proteome, which lost £649,000 in the year to June, could be big.

Meanwhile, Intronn Sciences, the company's US subsidiary, is poised to float in 2001. Proteome is pursuing 'collaborative research and partnering opportunities' for Intronn's 'SMaRT' technology.

Pearce claims Proteome has enough cash to see it through until 2003. At 61.5p, between a year's low of 10.5p and a high of 152.5p, the shares will not look dear, if the tests prove to be commercially marketable.

Share price: 61.5p

Market cap: £56.5m

52-week High: 152.5p

52-week Low: 11p

Ben Cobley - 3D hopeful's solid prospects

Three-dimensional imaging specialist TCT international (TCTi) can boast 'some exciting-looking technology'. This instantly enables users to capture medically accurate three-dimensional images of the human form.

TCTi's healthcare subsidiary 3dMD, has received several orders for its DSP400 facial imaging unit. A fundraising is on the cards for the New Year, either from Aim-listed TCTi itself or 3Q, its newly established 88 per cent-owned US gaming subsidiary. 3Q has clinched a deal with Babbage's Etc, the world's largest retailer of video games and PC entertainment software, to install its 'Q' booths in 100 US stores.

3Q users will be able to capture and manipulate their own images, then download them on to CD-ROMs for use in the latest video games.

Share price: 52p

Market cap: £16.467m

52 week High: 200.5p

52 week Low: 46.5p

James Crux - High-Point can reach new peaks

Historically, the share price performance of the international business consultancy High-Point Rendel has been uninspiring. The shares plummeted on the London Stock Exchange to a 2000 low of 53.5p in March.

However, the support services concern increased its pre-tax profits by 25 per cent to £3 million in the year to 31 July 2000, on turnover up £2.6 million to £27.1 million. A strategy of targeting high-margin growth has paid off, and the group has achieved particular success in business and management services, where margins were raised from 15 to 22 per cent.

Chief executive Kelvin Hingley recently agreed a five year installation deal and $1 million investment in the US firm Sure Power Corporation, which sent the shares up 9.5p to 88p, as the City began to realise the implications for High-Point Rendel of fuel cell technology applications on a global scale.

Share price: 88p

Market cap: £19m

52 week High: 93p

52 week Low: 52.5p

Helena Keers - Ambient looks to the long term

Fast-growing media and business services backer Ambient is described by managing director Andrew Stimpson as 'not an incubator, but keen to be the first for the future', after more than doubling first half losses to £5 million.

Aim-listed Ambient boasts a collection of potentially promising investments. One is Moneybox, where Apax Partners paid £5 million for a 35 per cent stake. Moneybox has won contracts to install 1,000 automatic teller machines around the country.

Another is WRMC, Ambient's electronic business intelligence subsidiary, which recently raised £20 million on techMARK, leaving Ambient with 54 per cent. Stimpson enthuses about another investment, smart card concern touch.co.uk.

Chairman Vincent Isaacs owns 47 per cent of Ambient, whose shares bottomed this year at 99.5p and peaked at 395p. They now stand at an undemanding 179p.

Share price: 179p

Market cap: £64m

52-week High: 395p

52-week Low: 99.5p

Leslie Copeland - KSS on a software roll

Knowledge Support Systems has been one of the best performing stocks on techMARK this year, rising from a placing price of 220p in March to 450p.

The main reason for the rise is the excitement surrounding its innovative software offering. The software, which has been developed over the course of the last 12 years, employs a sophisticated pricing technology that allows companies to boost profit margins by altering the prices they charge for their goods.

According to chief executive Madan Singh, KSS' software has already been proven under test conditions with a petrol retailer. He believes that other organisations, the likes of clothes, convenience and DIY retailers, stand to make substantial gains if they employ the product. Says Singh: 'the financial case for applying this software is very very clear'.

The company has already signed a Country License deal with a major 'national fuels supplier', and expects to sign another two in the near future. It has also signed a marketing alliance with Telecom behemoth Alcatel.

The group raised just under £37 million prior to float, and is currently valued at £346 million. This may make the company, which is only expected to achieve sales of £5.7 million this year - and a pre-tax loss of £685,000 - seem fairly valued. However, Adam Lawson of house broker Teather & Greenwood reckons KSS has much further to go. Says Lawson 'the market opportunity for KSS' pricing technology is huge'. Lawson forecasts that by 2002, KSS should be achieving profits of £9 million on sales of £29.5 million. His target for the shares is around 630p, although he cautions that 'investor patience is required'.

Share price: 460p

Market cap: £340m

52-week High: 605p

52-week Low: 195p

Roxanna Mohseni - Intercare is one to look after

Intercare has emerged from a bout of restructuring in good shape. Through a series of acquisitions, it has built itself into a distributor of generic pharmaceuticals and importer of branded pharmaceuticals. Boasting national coverage, and servicing independent retail pharmacists, the company looks set to benefit from the large number of high profile drugs coming off patent and repeated government endorsements of generics. Through selected investments, it has also gained a foothold in the high growth European markets and in an online business-to-business exchange.

Of greater interest is the recent £82.6 million acquisition of Martindale, a highly-rated manufacturer of specialist generic products. Martindale, which is expected to boost earnings before goodwill amortisation, brings with it a different client base - hospitals and chemists chains - allowing significant cross-selling opportunities. Intercare will further benefit from wider access to Martindale's manufacturing capacity and generics. Brokers UBS Warburg believe the combined group to be 'fundamentally undervalued'. With shares at 209p, trading on a lowly prospective p/e of 13, falling to 11.6 for 2001, I agree.

Share price: 220p

Market Cap: £162 million

52 week high: 220p

52 week low: 95p


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