COMMENT
Bright Ideas From The Boards

By Ed Bowsher (TMFArkle)
January 31, 2006

The Motley Fool's discussion boards are a wonderful resource where hundreds of shares are discussed each week. The trouble is, the volume of information can sometimes be overwhelming.

So to save you time, here are three discussion board stock ideas that have caught my eye:

Royal Bank of Scotland (LSE: RBS)

RBS has a big following on the Mid Cap Movers board and it's easy to see why. If you exclude HBOS (LSE: HBOS), it's the most efficient of the large UK banks, yet RBS trades on a price/earnings ratio of just 10, compared to a sector average of 11.5.

What's more, RBS chief executive, Sir Fred Goodwin, has in recent years pulled off several successful acquisitions including NatWest, direct insurer Churchill, and US bank Charter One. These deals mean that RBS is now a diversified group with plenty of growth opportunities outside the highly competitive UK retail market. Read this post for more on Goodwin's track record.

So why isn't the share price higher?

Some investors are concerned that Goodwin will want to make another acquisition and worry that he might over-pay this time round. Given Goodwin's track record, I think the bears should relax a little.

Premier Research Group (LSE: PRG)

Premier is a research company which conducts clinical trials for pharmaceutical companies. This is a growth area because regulators are pushing drugs companies to outsource more trials; independent companies are thought to be less likely to influence trial outcomes. Outsourcing can also save money.

One poster, AliceinWonder1, highlighted Premier's virtues in this post on the biotech and pharmaceuticals board. Alice pointed out that "acquisitions are a way of life" for Premier, and that is arguably a concern. Highly acquisitive companies sometimes hit the buffers.

On the other hand, Premier's overall growth story is impressive. Turnover excluding acquisitions jumped 19% to £5.1m in the first half of this year, while total turnover soared 41% to £6.1m.

What's more, earnings per share are expected to rise 27% in the next year. Using the current share price of 144p, that puts Premier on a forward price/earnings ratio of 17.

That's an attractive rating for a fast growing company in a market with plenty of potential.

Minco (LSE: MIO)

Silver has just hit a 22-year high of $9.85, so an investment in London's purest silver play, Minco (LSE: MIO), looks tempting.

Right now, Minco's main project is the Laguna silver tailings venture in Mexico. The tailings are mainly on the bottom of a lake and are the by-product of inefficient mining in the colonial era. Minco plans to start production this year.

House broker Collins Stewart has valued Laguna at £17.8m. Minco's current market cap is £21m, so if Collins Stewart is right, you're getting Minco's other ventures for £3m. These include a stake in the Pallas Green project in Ireland where there may be a profitable zinc mine. Minco also has several other exploration projects in Mexico.

On the downside, Minco may need to raise money via a share issue later this year. And demand for silver could fall as photographers continue to switch over from traditional film to digital cameras. (That said, there is increasing demand for silver from the electronics industry.)

For more information on Minco, read this thread on the Mining Sector board.

Be careful though. Small mining companies are notoriously chancy; I've lost money with similar companies in the past. Minco is not a classic Foolish investment and should only be considered by the most risk-tolerant investors.

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