Member Info for jange

Market value: £44.1 million Prospective dividend yield: 2.5%

The trust is a key barometer for how Impax as a group is doing as the process used to run it is employed across approximately £900 million, or half of the manager's total £1.8 billion of assets under management (31 October 2012). If the trust keeps on performing it should only be a matter of time before the market joins up the dots for Impax. The manager is looking extremely cheap on a forward price/earnings ratio of ten, especially since half of the firm's valuation is underpinned by cash. The company has no debt.

Building blocks The Impax Environmental Markets trust's largest holding is Irish materials giant Kingspan (KGP), itself a play on US housebuilding. The fund's net asset value (NAV) has risen by 14.1% since October (see chart) so it has kept pace with the ET 50. The vehicle's share price has woken up too. The NAV discount has narrowed from 18.0% at 31 December 2012 to 17.2% at the time of writing as the shares have risen by 12.5% year to date.

But while Europeans may be finding it hard to put a price on global warming, the political will to keep the system going is there and the US could well emulate the EU ETS in light of president Obama's clear preference for cap and trade over taxation as a rationing mechanism. Newsflow for alternative energy names should start to improve. A large number of stocks in the ET50 which manufacture green building materials are already giving out more encouraging signals, buoyed by a recovery in the American residential property market and ultra-loose monetary policy.

Warming up Downtrodden green companies are a leveraged play on equities as risk appetite improves and they bounce back from depressed valuations. The market is therefore overlooking how Impax is also a beneficiary of this theme, since its shares continue to drift. Sentiment may have been held back by a drop in the Carbon Emissions Certificate (CER) below €5 for the first time earlier his month. The CER is the cost for a European polluter to emit one tonne of greenhouse gas carbon dioxide within the cap-and-trade framework set out by the European Union Emissions Trading Scheme (EU ETS).

Yet environmental stocks should not be viewed through the lens of UK equities, since the bulk of their market value lies in the US. Those looking for a better handle on how they are really performing would be best to take a look at the globally diversified FTSE Environmental Opportunities All-Share (ET50) index, which can point to a 15.8% gain since the beginning of October 2012.

Environmental fund manager Impax Asset Management (IPX) is yet to reflect a recovery in its end markets, so buy now before this anomaly corrects itself. A likely rerating catalyst is continued strong performance from the firm's Impax Environmental Markets (IEM) investment trust. Impax sources much of its funds from British private client wealth managers and sentiment among UK investors towards green stocks remains resolutely downbeat. This is perhaps unsurprising. The last constituent of the FTSE All-Share from the Alternative Energy area was PV Crystalox Solar (PVCS) and it dropped out the index in June to leave UK investors bereft of a benchmark and with only memories of what had been a dog of a sector.

True, ICAP lacks a clear peer group from which to make valuation comparisons. But Espirito's sum-of-the parts estimate suggests that fair value is somewhere significantly south of the current share price. Add in the effect of a drawn-out Libor probe, capital concerns and weak trading, and that leaves the re-rating since November looking hard to sustain......but as always dyor and good luck.....

Yet the share price has jumped 25 per cent since mid-November and, based on estimates from broker Espirito Santo, looks pricey. Following half-year figures in November, the broker did a detailed calculation that suggested ICAP's shares were worth just 251p each. First it valued ICAP's telephone broking division on the same rating as shares in telephone broking specialist Tullett Prebon (TLPR). That produced a valuation of 452m. Espirito then assumed that weak volumes merited a nine times rating on ICAP's electronic broking arm, yielding a 617m divisional valuation. Finally, Espirito applied a 12 times rating to earnings of the post-trade services' unit - reflecting reasonable growth there - meaning a 713m divisional valuation. After deducting debt, that suggested fair value of 1.62bn, or 251p a share.

That's not the only reason to focus on ICAP's capital. It's also ready to roll out swap execution facility (SEF) services (essentially financial-market insurance contracts) in the US, but the capital requirements are still being hammered out with regulators. Broker Numis expects these regulations to require extra capital to support ICAP's SEF which, when added to the capital implications from a potential threat to the CRD waiver, may leave the attractive dividend payout in doubt. ICAP's trading is hardly impressive, either. Interdealer brokers thrive on volatility as that boosts trading volumes. But in today's comparatively calm conditions, ICAP is struggling. True, activity improved in January - electronic broking volumes rose 17 per cent year on year, helped by increased volumes in the US Treasury market. ICAP is also cutting costs and expects to make over �50m of savings in the current financial year. But third-quarter group revenue fell 13 per cent on the year and Numis Securities expects adjusted earnings for the year to end-March to fall 16 per cent.

ORD PRICE: 346p MARKET VALUE: 2.22bn TOUCH: 344-344.5p 12-MONTH HIGH: 432p LOW: 273p DIVIDEND YIELD: 6.6% PE RATIO: 10 NET ASSET VALUE: 166p NET DEBT: 14%

Certainly, ICAP isn't involved in the rate-setting, so a fine of the magnitude levied on the banks looks unlikely. But the fallout could go beyond a fine, with a possible effect on the so-called Capital Requirements Directive (CRD) waiver that ICAP has benefited from since 2007. Essentially, the waiver allows ICAP's regulated and non-regulated operations to be treated as one entity - allowing ICAP to set aside less capital than would otherwise be the case. "If the regulator decides that there is operational risk within ICAP it could call the CRD waiver into question," say analysts at broker Numis Securities. "A worst case scenario would be the removal of the CRD waiver before its maturity [in 2016] and if that happened it could mean a rights issue

The Libor-rigging scandal sprang back into life this month after Royal Bank of Scotland (RBS) was hit with a �390m fine. The scandal has now spread beyond the banks that set the rate and, late last month, money markets broker ICAP (IAP) said one of its subsidiaries was the subject of a Financial Services Authority (FSA) investigation. If the Libor probes into the banks are a guide, investors shouldn't expect a speedy outcome - leaving ICAP's shares exposed to lengthy uncertainty. The details are sketchy but, when Swiss bank UBS (UBSN: VX) was forced to pay its $1.5bn (947m) Libor fine in December, it emerged that its traders had used interdealer brokers such as ICAP - which acts as a go-between for banks' trading - to pass on requests for other banks' traders to bid specific Libor rates. So far, ICAP has suspended one employee and has placed three on leave. Meanwhile, US regulators are understood to be looking into ICAP, too.

Murgitroyd shares are rated at 12.7 times forecast earnings for 2013-14. That looks cheap compared with peer company RWS, whose shares trade on 18 times earnings, which is also the rating for the support services sector. That said, the share price is at a six-year high of 480p and within touching distance of its all-time high (520p). It's also difficult to deal in any quantity of shares. Still, if shares in a niche business with steady growth prospects are a sensible proposition, then Murgitroyd fits the bill...........but as always dyor and good luck.......

Keith Young, chief executive, says the reason behind the rising profitability is that Murgitroyd is getting more work done by its own patent attorneys. This reduces the amount they have to spend on costly external advisors in so-called disbursements, which go into the cost of sales. Encouragingly for investors, Murgitroyd increased its number of qualified attorneys during the first half from 64 to 67. True, there is some uncertainty on the horizon. The European Union recently reached agreement on the Unified Patent Court. This could greatly reduce the number of patent filings. There will no longer be a requirement to file patents in each EU country, as only one EU-wide filing will be required. Mr Young is unfazed. He says the new court will not open until 2014 at the earliest and, even when it does, it is unclear whether multi-nationals will prefer EU-wide patents to the existing tried-and-tested system. He doesnt anticipate a significant hit on revenues.

ORD PRICE: 480p MARKET VALUE: 42m TOUCH: 465-480p 12-MONTH HIGH: 480p LOW: 320p DIVIDEND YIELD: 2.7% PE RATIO: 13 NET ASSET VALUE: 256p NET DEBT: 13%

Growth overseas is an important element of Murgitroyds plans. The US business has two offices and client income there rose by 9.5 per cent in the first half of 2012-13. The first-half results also showed that, despite a slight fall in group revenue, gross profit margins improved from 58 to 60 per cent, feeding through to a 3 per cent rise in pre-tax profits to 2.27m, allowing management to boost the interim dividend 7 per cent to 3.75p.

Murgitroyd is a steady operator with a good track record. This is because despite - or perhaps because of - the economic gloom, organisations are keen to defend the intellectual property of their products from attack. Equally important, companies in Asia are scrambling to have their technology recognised and defended in Europe and the US, which are often their most important export markets. Latest figures from the European Patent Office (EPO) bear this out. Preliminary statistics for 2012 reported European Patent applications up 5.7 per cent to a record 258,000, and almost two-thirds of these came from outside Europe, with a quarter coming from the US.

What job would a genius choose? That's a pertinent question, and we know the answer. Albert Einstein started his working life as a patent clerk for its job security and reliable income. The reliable income is exactly why we think investors should take a close look at patent and trademark attorney Murgitroyd (MUR), whose share rating is far below the only similar quoted company on the London market................

Given the growth forecasts for 2013, coupled with the cash on the group's balance sheet, the share rating looks low despite recent share price strength. A return of capital has the potential to spark excitement about Computacenter's ability to generate cash, while the share price should benefit as the challenges of 2012 fade from the market's mind and growth prospects come to the fore.....but as always dyor and good luck.....