The Week In Review: A bitter pill for AstraZeneca

When a company chief executive promises to spend "whatever it takes" to establish a new product, his investors might be expected to take a sharp intake of breath.

When a company chief executive promises to spend "whatever it takes" to establish a new product, his investors might be expected to take a sharp intake of breath.

Sir Tom McKillop, of AstraZeneca, made just such a promise over Crestor, the drug maker's new pill for lowering cholesterol. It has already spent millions trialling the drug, and no doubt there will be expensive consumer advertising, too. But the track record of the salesforce should give investors confidence that Sir Tom's promises won't be missed.

So it is not with Crestor that the risks to Astra-Zeneca's toppy share price lie. Its previous successful mega-launch was that of Nexium, a (slightly) improved version of Losec, the ulcer pill which lost patent protection and is now haemorrhaging sales to copycat rivals. There is a risk that generic Losec - particularly a new over-the-counter version - will make Nexium a much harder sell, just as sales budgets are being focused on Crestor.

AstraZeneca shares are too expensive. Sell.

Kingfisher

The owner of B&Q has laid its foundations as a focused DIY retailer and is hammering home the message that it can make dramatic improvements in profits from focusing on own-label tools and screwing better deals from its suppliers. And the roll out of Brico Depots and mini B&Q warehouses will provide sales growth on both sides of the Channel. Buy.

Baltimore Technologies

Baltimore Technologies, developer of internet security software, put itself up for sale in May, but nobody wanted it. Baltimore has cash of 50p a share, but it is haemorrhaging that cash and does not have a fundamentally competitive business. The remaining business is still underperforming and a fire sale is unlikely to raise much to hand back to investors. Avoid.

Taylor & Francis

The Molecular Biology of the Cell may not be a Jilly Cooper, but in its own way it has proved a blockbuster for Taylor & Francis, the publisher of academic books and journals. The market for this type of book is eminently predictable and there is little chance that any of its titles will flop. But there is also little chance that any will hit the bestseller lists. The company pays no dividend to speak of. Avoid.

Corporate Services

The recruitment company which owns Blue Arrow has market leading positions placing lorry drivers, locum doctors and catering staff, but any upturn in the recruitment market may well lag behind an economic recovery. Corporate Services still has more savage restructuring to do in the UK, where break-even is still over a year away. The task is tough and private punters may want to hang on the sidelines for a bit yet.

Cobham

The company is looking forward to some big replacement orders for parts that go in the Javelin missile and Paveway laser-guided bombs. These proved popular in the war in Iraq, and Cobham should get its slug of the new money that US President George Bush has requested for the Gulf. So for investors who leave their morals outside their stockbroker's door, Cobham looks an attractive share to hold for the long term.

Ulster Television

Ulster Television, the Northern Ireland-based media group, may be dwarfed by its ITV cousins Granada and Carlton, but it has managed to outperform both in recent years. It has also benefited from diversification, and the real growth potential here appears to be in the radio sector. The likely approval of the merger between Carlton and Granada could see a bid by the merged company for UTV, but most believe this is three to five years away. Hold.

Mean Fiddler

Mean Fiddler is now focussed on live music venues, festivals and tours for best-selling artists, which are growing and profitable. Glastonbury, in which Mean Fiddler has a 24 per cent stake, had a record year; both it and Reading are well-established and will keep attracting big-name bands - and crowds. The group plans to expand and take its music venue brands, such as the Jazz Café, to other cities. Buy.

Paladin Resources

This company mops up the oil in fields too small for the big players to care about, and has proved beady-eyed in spying bargains. In May it snapped up assets in the North Sea from BP and Amerada Hess and plans to nigh on triple its production to 100,000 barrels of oil a day by 2008. Paladin can be trusted to avoid overpaying in future swoops on assets and is worth buying for the long term.

Next

Next has one of the savviest retail management teams around and, though the market may initially have been sceptical about the group's obsession with bigger stores, the plan seems to be working. The new space is beating sales targets and all eyes are on 2006, when Next opens a whopping 80,000sq-ft outlet in Manchester - its biggest by far. Its expansion story is not over and despite a strong run the shares look attractive.

International Energy

It is not quite the utility giant its name suggests, but it has built a lucrative little business bringing gas to 40,000 homes on the Isle of Man and the Channel Islands, 40,000 homes in Portugal and 100,000 homes in the UK. There is likely to be a further acquisition to expand IEG into other European countries. Meanwhile, the dividend yields just under 4 per cent. Worth backing.

Cox Insurance

Cox has shown that car insurance can be a nice little earner if you are able to operate in niches such as vintage cars, as well as the mainstream. It also has a rapidly expanding brokerage business: it co-ordinates a panel of insurers which its alliance of brokers can use. Inevitably many brokers use Cox itself, enabling the company to cherry-pick customers while also taking a cut of the business which goes elsewhere. Worth a punt.