One to Watch

NORTHGATE is the biggest light commercial vehicle rental business in both the UK and Spain by fleet size. The company's core business is the rental of vehicles to firms on flexible length contracts.

By its very nature, the firm is cyclical and its fortunes depend to a large extent on the economy: 2008 was a torrid year for Northgate as the downturn intensified but it was the collapse in the value of the used van markets that caused major problems.

Although neither the UK nor Spain is out of the woods yet, utilisation is back above 90 per cent. In addition, residual values have bounced in the UK and are showing signs of recovery in Spain.

The company has replaced its chief executive and its objectives are to cut cost and improve capital efficiency rather than simply grow the business. An investment is not without risk as Northgate is still very highly geared, having net debt of about 650 million.

If the economies that the company serves start to grow, Northgate should, through its operational gearing, benefit and hence the shares should in turn re-rate upwards.

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.

Domino's Pizza

340.7p -0.3p

Broker says BUY

THERE'S "no lack of talent" at Domino's Pizza, according to Charles Stanley, which lists the firm as a top pick in the FTSE 250. The broker said: "Given a consumer that remains cash-strapped, but still keen to enjoy the occasional food treat, the group's sales growth should remain robust."

Rexam

321.5p +8.8p

Broker says HOLD

AMBRIAN has maintained its "hold" recommendation on Rexam following the tin can maker's first-quarter update. The broker noted: "The first-quarter announcements from the US peer group had generated some recent share price strength from Rexam, and in that sense the first quarter-statement justified that move and didn't disappoint."