One to Watch: Bangers and cash

DEVRO makes edible casing for the food industry, supplying a range of products and technical support to the makers of sausages, salami, hams and other cold meats. The company also manufactures and markets collagen film, collagen gel, plastic coatings and collagen raw material for medical use. The company has manufacturing facilities in Scotland, the Czech Republic, the US and Australia.

Devro recently produced a sparkling set of results, increasing its dividend for the first time in four years against a rise of 76 per cent in full-year pre-tax profits. The firm also confirmed it is planning to invest in expanding production and is confident about its prospects for 2010.

Like many meat producers, Devro is benefiting from improving general living standards and this trend looks likely to continue, recession notwithstanding; some are forecasting total consumption of meat to increase by 25 per cent in the decade to 2015. Manufacturing facilities in areas close to expanding markets should allow the company to capitalise on this trend and, whilst Devro has benefited from favourable currency movements, its recent good performance is a reflection of a highly successful business plan, focussing on developing its markets; its cost control is also impressive.

Devro's shares have to an extent been re-rated already, but on a prospective p/e of 14 and a yield of 3 per cent they may be a solid platform for accessing growing international markets through the medium of a well run and financially robust concern. With increasing production likely to address capacity issues over the next 18 months or so, Devro does appear at least worth monitoring in these volatile environments.

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.

Marston's

90.25p -0.65p

Broker says BUY

A REPORT last week from Standard & Poor's "states that Marston's performance is 'better than most' of its peers and affirms the current credit ratings", according to Seymour Pierce.

The broker added: "We believe that this supports our view that Marston's is an 'unloved' hidden gem of the sector."

JD Wetherspoon

467.7p +4.1p

Broker says BUY

AHEAD of tomorrow's interim results from JD Wetherspoon, Numis carries a "buy" recommendation on the pub company, with a target price of 600p.

Numis added: "With the balance sheet stronger than it has been for a decade, there is a strong case for dividends returning in the second half of 2010."