One to Watch

ARM is the largest semiconductor IP company and its technology dominates the mobile phone chip market with a 95 per cent market share. In the first quarter of this year, ARM royalty shipments were up 67 per cent on the previous year as the phone market recovered and the shift to higher-value smartphones continued.

Smartphones, such as the iPhone and BlackBerry, have increased functionality, which can require up to five ARM chips versus only one or two in a "standard" phone.

ARM achieved its dominance of the handset industry by delivering an architecture that used less power than competitors. ARM's ubiquity is now leading to major market-share gains in areas such as digital TVs, hard disk drives and smartcards.

Most excitingly, ARM technology is now being used in netbooks, e-readers and other mobile computing applications. Despite its 25 times price/earnings ratio, we believe ARM will experience strong growth and would recommend buying the shares.

Investment markets and conditions can change rapidly, and as such the views expressed should not be taken as statements of fact, nor should reliance be placed on these views when making investment decisions. Past performance is not a guide to the future.

Domino's Pizza

355p +0.3p

Broker says BUY

AFTER visiting Domino's new production facility in Milton Keynes, Numis has reiterated its "buy" recommendation.

Numis said: "Our impression is the planning has been meticulous: the site has allowed room for growth, yet costs have been minimised wherever possible, typified by the main sign missing the word 'Pizza', saving 10,000 per letter."

Thomas Cook

205.9p +8.7p

Broker says BUY

THOMAS Cook has been upgraded from "hold" to "buy" by KBC Peel Hunt, which said the "risk reward is now more attractive". It said: "The shares have under-performed the market by 12 per cent over the past month and have fallen by 27 per cent in absolute terms since the beginning of April."