Midas: Walker Greenbank; BG Group

By This Is Money
Updated: 05:49 EDT, 1 October 2007

Walker Greenbank can trace its history back to the 19th Century, when it was an engineering company making gas containers.

Over the years, however, the group has shed its association with heavy metal and become a wallpaper and fabric business. The company operates at the premium-end of the interior design arena - the GSI (get someone in) sector rather than the DIY market-Brands include the upmarket Zoffany, as well as Harlequin, which is John Lewis's best-selling design after Jonelle.

It also acquired parts of Sanderson from the receivers three years ago, so owns the Sanderson and Morris brands.

The company is chaired by Ian Kirkham and his chief executive is John Sach. Kirkham came into the business in 2002 and set to turning it round and making it profitable.

Sach was promoted to his current position in 2004, having been finance director from 1999. Both men are keen to keep costs under control and the business focused on what it does best - designing, manufacturing, marketing and selling wall-coverings and soft fabrics.

The company not only makes its own products, it also works for a number of third parties. Fears about consumer confidence in the UK have affected many retailers and their suppliers, but Walker Greenbank appears more protected than most.

It is sufficiently upmarket that customers are expected to carry on spending on their homes for quite some time. And even if those at the wealthier end of the market choose to move home less, they could well decide to redecorate instead - and it is here Walker Greenbank comes into its own.

The company delivered an extremely upbeat statement at its annual meeting in July, saying that performance was significantly ahead of internal forecasts and that all key business units were doing well.

Interim results are due this week and many brokers believe the group will deliver further good news - which could see analysts upgrading profit forecasts for the full year.

The management team has spent considerable time, energy and money on the Sanderson brands and this work is expected to begin delivering results over the coming months.

Zoffany is being relaunched, too, and this should boost profits in 2008 and beyond.

Midas verdict: The current board is sharp and determined to succeed. Shares are trading at 50¾p and the stock market remains volatile. But this stock deserves to go higher.

Cracking Brazil is in BG's grasp

BG Group was recommended by Midas almost a year ago. At the time it was trading at 683p. Now the shares are changing hands at 846p, a rise of almost 25%.

The gas and oil giant has had an interesting year, moving in and out of favour, as much on whim and speculation as on business fundamentals.

But now it is firmly back in the City's good books, following confirmation of a major oil discovery off the coast of Brazil.

The Tupi well was originally announced last October, but in this market there can often be a large gap between discovering a well and being able to make it work. Yet BG has now revealed that Tupi is a real exploration hotspot with masses of potential.

Brokers believe that Brazil is an excellent prospect for BG as it has the opportunity to expand in the country later this year and beyond.

Clearly, BG is about more than Brazil. Tupi is expected to bolster the company's oil and gas reserves by up to 12 per cent over time, but the group also has a strong liquefied natural gas business and this is a growing market - particularly as it is considered more environmentally friendly than many other forms of energy.

• Midas verdict: A 25% uplift over a single year is not to be sneezed at, especially from a big FTSE 100 company such as BG. Investors could do worse than to sell some stock at these levels and bank profits. But they should not sell out completely.

This business is well run, well managed and well respected. Many in the City think the shares are worth at least 950p - a pound higher than current levels. Investors already in the stock should hold on to half their holdings for a while longer.