Now the future's weak for Orange

It is hard to agree that the future's Orange. The mobile group has lost a lot of its original edge, in terms of both marketing and corporate strategy.

It is hard to agree that the future's Orange. The mobile group has lost a lot of its original edge, in terms of both marketing and corporate strategy.

Orange is a maturing company ready to throw off substantial cash flows, but there was no clarity on what the money will be used for, whether it be dividends or aggressive expansion.

Its biggest markets are France and the UK, where customer growth must be almost nil going forward, and where the future will be bright only if Orange can win customers from rivals and make them pay more for new services such as picture messaging.

Yet it is losing customers in the UK. Vodafone Live! is already streets ahead on the multi-media front. And with 3, BT and Tesco among the new competitors on the scene, call prices are sure to be driven down, not up.

There are short-term plaudits to be won through cost-cutting, but it is possible that in the run-up to Christmas the competitive weakness of Orange will be exposed. Sell.

Unilever

The Anglo-Dutch consumer products giant has had a slow start to its financial year, when leading brands such as Dove soap, Flora margarine and Hellmann's mayonnaise grow by barely 3 per cent. But the good news is that the bad news is already in the price. Hints from the group suggest it will use its cash to buy back shares, supporting the price, so the stock is for the store cupboard.

Croda International

Croda International, the chemicals group whose products are used in suncream, air fresheners and lipstick, among scores of applications, has showed its pursuit of high margin, niche business has held it in good stead through the economic downturn. Hold.

Osmetech

The little company, famed for inventing an "e-nose" that can detect vaginal infections, has transformed its fortunes and its share price with an astute acquisition of a company whose technology measures oxygen in the blood. That business is growing because doctors prefer on-the-spot tests to ones that have to be sent to the laboratory, but Osmetech shares are, unjustifiably, twice the value of rivals. You are more likely to make money from short-selling the stock than buying it.

Isis Asset Management

Bear markets are no picnic for fund managers, but Isis Asset Management - the renamed Friends, Ivory & Sime - says revenues so far this year were higher than expected and costs were lower. That's a good combination in a sector struggling to attract customers and which has seen fund values and fees plummet. Isis needs another good acquisition to bring about growth but at least we know it has that ambition. Hold.

Allied Irish Banks

Allied Irish Banks, Ireland's biggest bank by market capitalisation, has had to wave a wistful goodbye to the days when it was one of the Emerald Isle's premium growth stocks. The fall in eurozone and UK interest rates has put pressure on the margins across the banking sector. In addition, the Irish economy has slowed and AIB has also had to cope with the strengthening euro, which has reduced the value of its overseas earnings. Avoid.

Games Workshop

With fantasy books and films seemingly everywhere, the pastime is enjoying a renaissance. Games Workshop warns that a promotional supplement had driven The Lord of the Rings sales to levels that might not be achievable again this year, but there are other compensating developments, including new shops and businesses overseas. Hold.

BAA

BAA, the company which owns Heathrow and six other UK airports, predicts 4 per cent more passengers through its gates this financial year than in the previous 12 months, when it saw off or greeted a record 127.7 million passengers. The numbers for Heathrow, dependent on depressed international travel, are forecast to be flat, but any signs of life in business travel later in the year could lead to upgrades. Buy.

Royalblue

It is never usually the case that less is more. Royalblue now gets half its revenues in steady rents for its software, but old-style consultancy fees are falling off faster than they are replaced. Predictable rental income is more highly valued by the stock market than volatile consultancy fees. But less overall revenue is less profit than shareholders had been led to hope. Avoid.

Aviva

Life insurers have struggled to sell products to customers who are unwilling to invest after getting mauled by the bear market. But Aviva says savers are returning. With the biggest insurance brand in Britain, Norwich Union, Aviva is bound to pull in market share. Its financial strength, diversification and market position make it a good long-term bet. One to tuck away.

Shire Pharmaceuticals

Shire is going back to a strategy of growth by acquisition, and the new chief executive, Matthew Emmens, will be judged by results. The company's drugs face patent challenges, and US approval for the kidney drug Fosrenol has almost certainly slipped to next year. But these fears have been reflected in Shire's depressed shares for a while. Hold.

LA Fitness

Fitness clubs are notorious for burning more pounds from their members' wallets than their waists, and their relationship with investors is no different. Today, just LA Fitness survives as a public company to face shareholders who have seen once-fat returns slimmed down. Although there is still growth left in the sector, health club memberships will be among the first to go when record debt levels catch up with consumers. Fully valued.