Brokers' Views: FinnCap

One of technology analyst Paul Cornelius’s small company picks is Cardiff-based semiconductor wafer maker IQE. Welshman Cornelius has set a 25p target for the shares, recently 18.5p, following strong results from AIM-quoted IQE’s biggest customer.

Component maker TriQuint, accounting for around 20 per cent of sales, have risen by 28 per cent over the past six months, demonstrating the ‘rapid recovery from the economic slowdown in the mobile device space’ and Cornelius still urges clients to buy IQE.

He has however set a more challenging target price of 9.75p, versus a market price of 3.8p, for mobile communications group Synchronica. Having received a third purchase order from North Africa in as many months and with a ‘positive outlook’ for further deals, the broker has ‘confidence that the group will record strong revenue growth during 2H09’.

A gold hold

Fast-growing pawnbroker H&T recently confirmed it is trading well ahead of expectations for the year to December. Attracted by the high price of gold, customers are flocking to pawn jewellery and H&T is reaping the rewards. However, the board is not changing its expectations for 2010, cautioning that gold purchasing volumes could decline.

Analyst Duncan Hall’s 2010 forecast, of £13.8 million pre-tax profit and earnings of 27.2p, remains subject to the effect of gold purchasing volumes. He admits that he had ‘anticipated some slight contraction in that market’ due to increased competition but now says that this strong trading encountered ‘could encourage upgrades if it follows through into the new financial year’. He maintains his hold stance on the shares.