One to Watch: Assured IT investment

NCC404.5p +4.5pScotsman says BUY

NCC provides information technology insurance services to both the public and private sectors. It has three main divisions: escrow, which is involved in verifying that information can be rebuilt from its components; assurance testing, which is involved in testing and monitoring network and website performance; and the NCC Group Consultancy brand.

NCC is not, perhaps, the easiest company to understand. It is the world's largest software escrow provider, with solutions designed specifically to help organisations that are dependent on crucial assets that they do not own or control. These assets include the software behind business-critical functions, managed internally or through an outsourcer, or designs and processes formally supplied by a third party.

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These assets are held securely with a supplies agreement on the end users' behalf ensuring that, if the suppliers' business fails, or they do not maintain their contractual obligations, the material can be released to the user quickly and legally.

NCC's escrow division is regarded as one of the most predictable and cash-generative businesses in the IT sector, with more than 70 per cent of its revenues recurring.

The escrow business also tends to benefit from a deteriorating economy, as clients become more concerned over software vendor failure.

The resilience of this business model is demonstrated by the performance of the share price, which has risen from about 280p over the past year.

The shares have pulled back a little and this might be an opportunity for considering them as part of a well-diversified portfolio.

• 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.


1,693p +26p

Broker says BUY

SAB'S share price gives an "attractive entry point", Evolution said. Noting that shares have fallen from 1,840p on 11 January, when SAB unveiled the takeover of a Mexican brewer, Evolution said: "With the scale of the sell-off not supported by fundamentals, investors should use the weakness as buying opportunity."

Best of the Best

32.5p -3p

Broker says BUY

CHARLES Stanley has maintained its "buy" recommendation on Best of the Best, which runs raffles at airports in which entrants can win sports cars.

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The broker noted: "Interims are in line with expectations, with robust profit growth complemented by good cash conversion."