One to watch

Balfour Beatty is developing its business model and diversifying overseas; at the end of last year, it purchased US group Parsons Brinckerhoff, which has a range of operations very similar to its now UK parent. Balfour Beatty recently reported its interim results, which were impressive, including an excellent initial contribution from Parsons.

The interim results confirmed the challenges, with construction revenues in the US down over a fifth and by some 9 per cent in the UK. Still, the group has a strong balance sheet, with net cash of around 436 million. Balfour Beatty is now an international concern, standing on what appears to be an undemanding rating and a prospective p/e of around eight and a yield of 4.7 per cent. Worries about the company's exposure to reductions in UK public spending may offer an opportunity to consider the stock further.

l The value of your investment could fall and you may get back less than you invested. You should take professional advice if you have any doubt about the suitability of this stock for your portfolio.

Balfour Beatty

244.2p -0.1p

Scotsman says BUY

BROKER SNAPS

CITI expects to leave its forecasts unchanged following Tuesday's interim results from Whitbread, which owns Costa Coffee and Premier Inn. The broker said: "Whitbread's capital-heavy rollout model absorbs considerable free cash flow, which reduces our valuation upside compared to sector peers."

Whitbread

1,509p +8p

Broker says HOLD

Retailer WH Smith has been upgraded from "hold" to "buy" by Seymour Pierce, which the broker thinks will "come back onto investors' radar screens given its defensive growth prospects, strong cash generation and 4.4 per cent yield". Seymour Pierce's rating had been at "hold" since 23 April 2009.

WH Smith

429.5p -2.4p

Broker says BUY