One to Watch

Pace152.4p -0.2pScotsman says BUY

PACE develops, designs and distributes digital set-top boxes for the global pay TV industry. The company provides its services over satellite, terrestrial, cable and IP network transmission systems to customers that include Sky, BT, Foxtel and Canal+.

A recent study by IMS Research showed that Pace is the world's largest supplier of set-top boxes. It is to incorporate Wi-fi technology into future set-top boxes, allowing users to share audio and video content.

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A trading update in late April highlighted that full-year trading was in line with expectations and that the markets for pay TV remain strong. The company hopes to grow gross margins by increasing efficiencies in 2010 and has targeted mid-single-digit revenue growth.

The share price has fallen by about 37 per cent in eight months amid concerns about currency weakness and a market slowdown, but the company's dollar earnings should offset euro weakness.

With a strong balance sheet and an undemanding rating, these shares may be worth monitoring.

• 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 company for your portfolio.


646.8p +2.3p

Broker says BUY

AFTER the "very positive update" from HSBC last month, Galvan Research has made it a "buy" with a price target of 687p. Head of research Andrew Gibson said: "Galvan believes HSBC's broad exposure and spread of risk means the share price weakness since 7 May update is unjustified."


56p +0.75p

Broker says BUY

RBS Equities has raised its target price on ITV from 71p to 75p. The broker said: "RTL is exploring a disposal of Five. We believe ITV is the most logical buyer (given synergies), and we believe a deal would be highly accretive to ITV's earnings (we estimate 24 per cent). While regulatory hurdles are meaningful, we don't see them as being insurmountable."

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