Analyst Michael Blogg regards FTSE 250-listed materials science company Cookson as one of many companies that ‘have been hit by negative sentiment that is out of proportion to the likely impact of the anticipated macroeconomic environment’. Some have been ‘susceptible to misinformation’, such as Cookson, which featured in an erroneous article which claimed it needed to refinance short term and which Blogg regards as a ‘buy’.

He thinks cash-generative heat treatment and coatings group Bodycote, another ‘second liner’, could benefit from downturn, having offloaded its testing division for £380 million in a move leaving the company modestly geared.

‘The more the group’s customers and potential customers are affected by declining demand, the more likely they are to shed in-house thermal processing in favour of outsourced provision, in view of the considerable benefits of scale that Bodycote can share with them,’ he opines. He strongly urges clients to buy and sets a 260p target, more than double the current 118.25p market price.

Taxi sales slide

The outlook for Manganese Bronze, the maker of London’s black cabs, on the other hand, is less encouraging. Sales of taxis in the year to date are down 37 per cent, meaning profits will be depressed by the company’s high operational gearing, the impact of purchasing engines in euros as well as the costs of investing in a Chinese joint venture. Blogg thinks ‘it will be tempting for investors to write off 2008 completely and to focus on the potential for recovery in 2009 and beyond, at a time when most other companies are turning down’.

Arbuthnot Banking Group	AIM	£36.35m	247.50p	0.00p
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