Companies: BTSM    MTO    NXT    SDY   

Recent picks from broker Bridgewell Securities include retail giant Next, which ‘is not getting much bang for its buck in buying back shares’. In the absence of buybacks, the broker thinks the FTSE 100 play’s returns would allow it to operate comfortably with a well below average level of dividend cover, and that the share price upside from a switch in policy could be ‘potentially very significant’. ‘Next,’ argues Bridgewell, ‘is undervalued for a cash-generative business and should perhaps be looking at “alternative approaches” to distributing surplus cash.’

Coverage of large support services ventures included BSS, where interim pre-tax profits came in at £21.3 million, almost 25 per cent ahead of last year. A strong results statement from the FTSE 250 distributor of heating and plumbing equipment included news of ‘strong like-for-likes in both divisions’, and margin growth, notably at the industrial arm. Bridgewell retains its bullish ‘overweight’ stance based on momentum ‘likely to continue to push numbers ahead into 2007’.

Bridgewell rates shares in Speedy Hire a ‘buy’ based on good underlying revenue growth and a near-20 per cent profits spike for the first half year, with growth drivers in the tool hire group’s business apparently strong. ‘Fundamentals are good, with regulation, safety and the national client opportunity all feeding through to good growth,’ says the broker, upgrading its recommendation from overweight.

Bridgewell is less effusive on £660 million MITIE Group, however, preferring to take a neutral stance despite near-16 per cent profits improvement at the half-year and 26.3 per cent dividend growth.