MARKET COMMENT
Shares For A Bull Run

By Maynard Paton (TMFMayn)
September 17, 2003

These days, every man and his brother is a 'value' investor. No surprise really, since the bear market has unmasked numerous 'growth' share charlatans. Plodding smokestack businesses with their reliable dividends are now the way forward. Or are they?

Trouble is, us punters too often invest through the rear-view mirror. The time for high dividend shares was 1999 -- prior to the bear -- not 2003. So, looking forward to the emergence of a new bull market, surely now must be the time to return to growth shares.

As noted before, tomorrow's bull market leaders will be small, growing companies that are too young and too obscure to have upset a crowd of investors during the previous market downturn. With no history of disappointment to hold them back, investors will soon appreciate these new stock market 'stories', especially if a castle in the air can be constructed.

With that in mind, Telecom Plus (LSE: TEP) could well be a future bull market champ. Floated in July 2000 at 200p, its shares now trade at 287p -- somewhat amazing given the company's activity: supplying telephony services to small and medium-sized businesses. Today, Telecom Plus said its full-year profits would be 'significantly ahead of expectations'. What were those expectations? Earnings growth of 25% this year and 35% next.

Corin (LSE: CRG) should also do well in a bull run. It develops and manufactures a wide range of reconstructive orthopaedic devices and floated at 111p during May 2002. Corin's latest annual results showed sales up 23%, profits up 62% and operating margins of 18%. With 'considerable' opportunities for 2003, brokers anticipate profit growth of 44% this year and 24% in 2004.

Finally, Sondex (LSE: SDX) is another growth business without bear market baggage. Having floated at 100p just three months ago though, the developer of oil well inspection devices has yet to publish any results in listed form. Still, over the past four years, operating margins of 27%-plus have been recorded, while sales and profits have experienced average annual growth of about 25%. 'Increasing demand' and lower interest payments are set to boost this year's earnings per share by 170%. Growth of 19% is expected in 2004.

Key details

Share            Price     Market Value     Forward     Forward
                  (p)          (£m)           P/E      Yield (%)

Telecom Plus      287          174            32          2.3   
Corin             168           65            23          0.7
Sondex            142           55            17          1.4