The Week In Review: Buy these shares and clean up

Johnson Matthey is cleaning up. In both Europe and the US, new legislation is forcing the manufacturers of heavy-duty diesel vehicles to cut engine emissions.

Johnson Matthey is cleaning up. In both Europe and the US, new legislation is forcing the manufacturers of heavy-duty diesel vehicles to cut engine emissions. It is the industrial equivalent of the introduction of catalytic converters as standard to cars in the 1990s, and Johnson Matthey - which makes the chemicals used as catalysts - is expected to enjoy some impressive sales growth over the rest of this decade as a result.

Indeed, the company operates in several exciting medium- and long-term growth areas. It has a strong business, making ingredients for drugs, when an ageing population guarantees there will be growing long-term demand.

And buyers of Johnson Matthey shares are also taking an option on the emergence of fuel cell technology in which hydrogen can be used as an alternative to traditional energy sources. The group makes parts for experimental fuel cells in a division that could break into profit soon and be a dramatic plus to the group in the long term.

Johnson Matthey's balance of prospective growth and modest 3 per cent dividend yield makes the shares look compelling. Buy and tuck away.

OXFORD BIOMEDICA

Oxford BioMedica has been methodically progressing work on an exciting vaccine to help the immune system attack cancer. There are still many hurdles to overcome before commercialisation and the UK biotech industry's specialist investors are waiting for the appointment of a bigger company as co-funder and development partner before getting carried away. Private investors should do the same.

FORTH PORTS

Forth Ports, as you can guess, runs five ports on the Firth of Forth, plus Tilbury on the Thames and, excitingly, a port in St Petersburg. Shipments of goods into and out of the UK has been moving to Forth's advantage away from the congested South, and the company has freed up its unused land on the Edinburgh waterfront for lucrative redevelopment. Hold.

BRIXTON

Brixton owns 25m sq ft of commercial property - business parks and warehouses, mainly in the South-east - but property values have been pushed unsustainably high by speculative investments. Brixton, like other property shares, has also been boosted by the prospect of conversion to an investment trust, but this long-term tax benefit will have to be paid for upfront. Sell.

CHESNARA

Chesnara once sold mortgage endowments to the customers of the Countrywide estate agency chain. The life book is now closed, and it is hard to understand, on first impressions, why anyone would want to touch a stagnant business like this. But the beauty of closed life books is that they generate a steady cash flow - in Chesnara's case, providing the funds for its enormous 10 per cent dividend. Buy.

BARRATT DEVELOPMENTS

It bears repeating. This is not the early 1990s, when double-digit interest rates combined with a recession to cause a slump in the housing market. This is not the early 1990s, when some indebted and inefficient housebuilders recklessly chased a volume of new business that could not be sustained when the housing market tumbled, leaving many companies in financial ruins. Barratt Developments is the UK's biggest builder by volume, and its shares are a long-term buy.

KESA ELECTRICALS

"Un peu décevant" was one French broker's verdict on annual results from Kesa Electricals. That's "a tad disappointing", in English. Kesa owns Darty, the electrical goods retailer, and BUT, a furniture chain, in France. It also has Comet in the UK. Consumer confidence is turning down. Avoid.

TOPPS TILES

People haven't fallen out with tiles, insists Nick Ounstead, chief executive of Topps Tiles, who was forced to deliver a profits warning this week. The retailer has up to now been a remarkable success story. Mr Ounstead is sure that it is a market problem (a plunge in consumer spending generally), rather than a problem at Topps, and the City is willing to give him the benefit of the doubt. Hold.

CAIRN ENERGY

Cairn has had an extraordinary few years, buying a block of land in north-western India from Shell and then discovering it was sitting on at least a billion barrels of oil. The shares soared, inevitably beyond levels that could be entirely justified by the drilling progress to date. After the correction, stagnation is likely for some time, but existing shareholders should hold on for the long term.

BPB

Demand for plasterboard is likely to slightly outpace economic growth, as it makes a lot of construction cheaper and easier than older methods. BPB is a global player, but it is expanding its manufacturing capacity in the US and Asia. Hold.

Admiral on course after flotation

Six months on since Admiral, the motor insurer, successfully floated on the London market, and the company is still looking in incredibly good shape next to its major rivals.

But with motor insurance premiums lower than 12 months ago, and the cost of meeting claims for accidents rising, the worry for investors is whether Admiral's performance can be sustained.

The company focuses on specialist lines - such as female drivers with Diamond, and younger drivers with its Admiral brand - where it has scope to raise rates. And marketing plays a much more important role in winning customers now than it did when the world was controlled by insurance brokers. Admiral's brands are strong, its adverts memorable.

The company also makes a convincing case that the low point for premiums will not be as bad this time as in previous cycles.

After recent consolidation - during which Royal Bank of Scotland and Aviva have gained 50 per cent of the motor market between them - there is simply less price competition.

This may appear a rather risky point in the cycle to be investing in a motor insurer, but Admiral comes with the bonus of a healthy dividend, as well as the promise of further special dividends if the company is sitting on excess capital. Buy.