Since we first backed contract electronics manufacturer Stadium Group in February last year the shares have traded for as little as 45p each, but they have also changed hands for as much as 72p each. The latter level was achieved in late April, and Stadium’s shares have since fallen back to trade for a few pennies more than the 60.5p price at which we originally recommended them.

However, we think Stadium could be heading back above 72p soon enough thanks to the business bucking the trend when it comes to consumer demand, a high dividend yield and recent director buying.

In mid April, Stadium’s chairman Nick Brayshaw revealed that sales for the first quarter of this year were well ahead of the corresponding period for 2007. ‘Economic forecasts in the wider global economy show evidence of weakening consumer demand; however, the overall outlook for Stadium continues to be encouraging,’ he said.

Investors who got in on our original tip have already benefited from 6.35p per share in dividend payouts, and Stadium is forecast to pay out another 3.9p per share in dividends this year, which means the shares currently have a yield of 6.1 per cent. And these dividends are covered almost twice by estimated earnings per share of 7.7p for this year (2007: 7.4p). Meanwhile, Ken Leung – a director of the business – recently increased his stake in Stadium by 15,000 shares to 265,400 shares.

Despite the gloomy economic prognoses that are coming out of the US and Europe, it is worth remembering that Stadium has expanded its operations beyond Hartlepool and now has an expanding manufacturing facility in Changping City in China.

For all the above reasons, we think it is worth topping up. Buy.

Stadium Group	AIM	£12.67m	44.00p	0.00p
Click here for interactive charting
Other company articles:
Stadium Group			03/11/2008
Stadium Group			28/08/2008
Stadium Group			02/06/2008
Stadium Group			07/09/2007
Stadium Group			06/09/2007