The Investment Column: AG Barr kept itsfizz while rivalshad a flat summer

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Our view: Buy

Share price: 1165p (+10p)

AG Barr's own products were probably left in the fridge last night, with the board preferring instead to pop the champagne corks after announcing strong preliminary results.

The soft drinks sector toiled in last year's disappointing summer weather, but AG Barr, maker of Irn Bru and Lipton Iced Tea, bucked the trend and had analysts lining up to recommend the stock after posting a 27.4 per cent rise in pre-tax profits to £20.8m.

The chief executive, Roger White, a self-confessed "dour Scotsman", refused to get too excited, and warned that the group continued to face challenges in "a very competitive market". He pointed out the firm's 2007 figures looked impressive partly because "we probably didn't do as well as we'd hoped in the warmer weather of 2006, and so the comparisons look good". But the analysts are having none of it. "They are in a unique position," say watchers at Altium Securities. "The company focuses on the regional habits of its customers, which do vary. Its products address those differentials."

The firm is in a good position for 2008. It has centralised warehousing and distribution activities in Cumbernauld, and although some of the resultant savings have been ploughed into marketing for new products after small acquisitions, the firm reckons the benefits of the efficiency drive were not fully represented in yesterday's numbers.

Trading figures from the first three months of 2008 are encouraging, with sales up 3 per cent on the same period last year. The firm is always under the threat of legal changes that could mean alterations to labelling, or even the contents of drinks. Moves to combat obesity may hit demand for its sugary drinks, such as Orangina, but the firm does make healthier mineral water drinks too. Buy.

Ferrexpo

Our view: Buy

Share price: 356.5p (+2.5p)

Demand for iron has soared as emerging markets such as China and India have grown, which is great news for iron producers such as Ferrexpo. The group, which has mines in Ukraine, had an excellent year in 2007, its first as a listed company, with annual results published yesterday showing a 95.2 per cent rise in profits and a 28 per cent growth in revenues to $698m (£353m), 11 per cent ahead of the expectations of its own brokers at Cazenove.

But the best for the group may be yet to come. The price of iron ore pellets, the product that Ferrexpo specialises in, has rocketed up in the last year. Recently the Brazilian mining giant Vale signed an agreement with an Italian mill at an 87 per cent increase to last year's prices; Mike Oppenheimer, Ferrexpo's chief executive, says that his firm will announce its new contract prices, which cover 90 per cent of its production, "in the first half of April," and that they will be in line with the Vale deal.

The company expects to quadruple production at its sites in Ukraine in the next 10 years, and with global demand for iron ore rising by 50 million tons each year, this should encourage investors that the firm is a strong long-term punt.

An analyst at Altium Securities highlights the lack of project experience the group has, saying that there is an "execution risk" associated with the group's plans, a point conceded by Mr Oppenhiemer. However, he stresses that for the immediate future Ferrexpo has sufficient funding to finance its plans, and is drawing up a shortlist of partners to undertake further projects on its mines that are hitherto untouched.

There are other risks too. The concentration of the group's sites in Ukraine attracts political concerns, but Mr Oppenheimer dismisses suggestions that the government is "Russian styled" when it comes to state interference. One reason for this might be that a Ukrainian MP, Kostyantin Zhevago, owns 73 per cent of the group. Investors may be disappointed to know that he does not plan to sell any of his stock soon. Buy.

Southampton Leisure Holdings

Our view: Sell

Share price: 34p (-2p)

Being a supporter of Southampton football club, which is owned by Southampton Leisure Holdings, has been a bit miserable in recent years. After the highlight of reaching the FA Cup Final in 2003, it was relegated from the Premiership two year later.

The shares are trading at their lowest point for 12 months, and there is nothing to indicate that they will rise soon. Annual revenue is down to £7.1m from £12.8m in 2006, according to results published yesterday.

The club is caught in something of a Catch-22. For two years after its relegation the club received so-called parachute payments to offset losses in television revenues. These ran out last summer, forcing the team to sell its better players. Without them the team is going to find it tough to get back to the higher league and reap the rewards of the additional television money.

Southampton claims to have "one of the strongest squads in the Championship," despite currently languishing in 21st place. Undoubtedly, the club is not one of the strongest investment opportunities. Sell.