Companies: CMR    COL    DOM    ETR    ISG    MJW   

People have been saying it for a long time now, but the fact is that this prolonged bear market has thrown up some nice-looking opportunities across all indices and sectors – but especially in the smaller-cap sector. The flight of investors large and small has left a number of quality performers on fetching-looking ratings, some of them ridiculously low.

Well-known players

It is a common perception amongst some of the more snobbish types in the financial services (which covers quite a sizeable number of people) that Aim is a market for speculative ventures with hopes and dreams but little else. A scan of the companies on the ever-growing Aim list (approaching 700 in size at the last count) shows this to be partially true. But any market that includes the likes of Ask Central, Dominos Pizza, Majestic Wine, Enterprise, plus a raft of other less well known but equally successful ventures amongst its constituents is not to be sniffed at.

Of these, Majestic (recently feted as PwC's Aim Company of the Year) and Dominos are both trading at a premium to a year ago, and fetch 14 and 17 times prospective earnings respectively – more than justified. However Ask, despite itself being in excellent shape, has been battered by the travails of sector leader PizzaExpress, through no fault of its own. At the moment they trade on broadly comparable prospective ratings, despite Ask's growth rate being massively higher than its competitor's.

Support services group Enterprise is down 50 per cent on a high reached over the summer, though more because of a (probably justified) downwards re-rating of the sector than anything else. Nevertheless, a forward p/e of 13 at 216p looks more than merited for this high quality group.

Less renown, lower rating

However, better value might be had from less well-known companies like £40 million-rated Interior Services, a big force in the formerly-fashionable facilities management arena. Growth is expected to slow this year after last year's £8.1 million pre-tax profit (an increase of 15 per cent). But with the shares having halved from their 52-week high, they look underrated on a prospective rating of less than seven.

There is also the juggernaut that is Peel Holdings, Aim's biggest company and one that is currently trying to gobble up fully-listed Clydeport for £184 million. The company is on a 35 per cent discount to its net assets and made £33.4 million pre-tax last year, giving it a historic p/e of 14. This is decent value, even after recent rises, as the deal looks a good one.

But it is amongst the even-smaller Aim companies that good value is most likely to be found. Irish estate agency Sherry FitzGerald is a case in point. Good-looking results were recently followed by a trading statement saying that trading was better than expected, helping the shares up 20 per cent to C1.20. But given that upwards of 27 cents per share of earnings is now expected this year, a p/e of 4.4 looks miserly.

Amongst resources groups, Cambridge Mineral Resources looks alluring. Boss David Bramhill (also boss of eastern European hopeful Hereward Ventures), claims prospects are excellent for the minnow, which is now looking to bring its Lomeros-Poyatos gold, zinc and copper deposit into commercial production. Doubts were raised about the project when mining major Newmont pulled out of plans to buy it. but the two Newmont directors responsible for evaluating it have now joined Cambridge and claim the project has the potential to boost the share price (still depressed at 10p), many times over.

Comeleon coming up

Comeleon the digital printing firm headed by serial chairman John Pither, will be reporting its final results on 4 December, having so far seen the good progress that it has made not reflected in its share price. Now at 39.5p, the company trades 76 per cent below the level at which it floated in December 2000. However, it has been increasing its sales impressively in recent times, while opening up new opportunities through Philips and in the US. The group specialises in imprinting sophisticated graphics on to electronic consumer goods like mobile phones, using its patented 'e-comeleon' process.