One to Watch: Take a risk on Beazley

BEAZLEY is an international specialist risk insurance and reinsurance business. It has four managed Lloyds syndicates, covering five segments – marine, political risk, property, reinsurance and speciality lines.

Beazley's shares have been particularly dull over the past quarter. This seems an odd reaction, given that the company, as recently as the beginning of November, reported a 45 per cent increase in premiums written to the end of September. This success was partly the utilisation of some of the 150 million it raised at the beginning of the year, aimed at taking advantage of the better rates, especially in catastrophe-exposed lines.

It also confirmed that underwriting conditions have been favourable, with rate increases of 4 per cent being achieved across its portfolio. Hurricane claims were down sharply, although there was an increase within its political risks book, perhaps as a result of the activities of Somali pirates. This may explain the shares' recent relative weakness.

In addition, there have been some key board changes this year, including the arrival as finance director of Martin Bride, who brings with him more than 20 years' experience in the insurance industry.

Insurance underwriting firms can be difficult to understand and, of course, potential risks are impossible to quantify, but Beazley has an excellent record within the industry.

It is estimated that the shares trade at, or around, 24 per cent discount to its net tangible asset value and is on an undemanding price-earnings ratio of about four. The shares offer a prospective yield of about 7 per cent, which looks pretty secure and has its own attractions in these revenue-straitened times.

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.

Games Workshop

332.5p +77.5p

Broker says BUY

FOLLOWING a "very positive" trading update from Games Workshop, KBC Peel Hunt has shifted its rating on the model retailer from "hold" to "buy".

KBC added: "We are returning to a 'buy' recommendation as the shares are now trading on a price-to-earnings ratio of 8.7 times the May 2010 estimates."

ProStrakan

85p unch

Broker says BUY

PROSTRAKAN'S "valuation is attractive once again" according to Charles Stanley, which carries a "buy" rating on the Galashiels-based drugs company.

Charles Stanley said: "The shares have fallen by a third since September. Now the shares are trading at these levels, we believe they are once more attractive."