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Alkane Energy (ALK)

Andrew Gibson, Head of Research

Alkane energy produce electricity from coal gas. The company operates 12 mid-sized power plants across the UK and sells its output through an electricity distribution network. The groups energy portfolio includes coal mine methane, biogas, conventional gas and coal bed methane. Alkane took a gamble last year and decided to increase its generating capacity in the UK by 26% - adding three new sites to its existing generators. This investment is clearly paying off as theyve been able to meet the ever growing demand for its electricity. The company has made a cracking start to the y e a r. F i r s t q u a r t e r revenues rocketed up over 50% as electricity output increased by 54%. The energy market is volatile so Alkane has been taking advantage of high energy prices by locking-in future revenues. Theyve now got 88% of 2011 production forward contracted

and also have 15% of 2012 projected output locked in. Alkane looks fundamentally cheap. The shares currently trade at an eye-catching forward PE of 7.6 which is even more attractive when compared to a forecasted earnings growth rate of 58%. The price chart shows that the shares have pulled back 30% since May, giving an attractive entry point. 5 year price chart:

Galvan Research and Trading, CMA House, Newham Road, Truro, Cornwall, TR1 2SU Risk Warning Notice: Galvan Research And Trading Ltd is authorised and regulated by the Financial Services Authority (FSA). Whilst every attempt is made to ensure the accuracy of the information provided, no responsibility can be accepted for any inaccuracy. The information provided cannot be relied upon as constituting a recommendation, nor construed as any offer to sell, or any solicitation of any offer to buy investments. No liability is accepted for any loss whether direct or indirect, incidental or consequential, arising out of any of the information being untrue and / or inaccurate, except to the extent caused by the wilful default or gross negligence of Galvan Research And Trading, its employees, or which arises under the Financial Services And Markets Act 2000.

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T: +44 (0) 1872 262622 F: +44 (0) 1872 265326 E: mail@galvan.co.uk W: www.galvan.co.uk

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Kier Group (KIE)

Kier is involved in the construction, development and servicing of property and has secured 600m of new work since January this year. The construction side of the company is reaping the benefits of having such well established relationships with its major clients. Kier have managed to secure over 80% of targeted revenue until June 2012. Safe in the knowledge that sales are secure, Kier will be targeting work in the power and waste sectors which should generate solid organic growth. The service side is well positioned to benefit from outsourcing opportunities created by the governments efficiency drive. New contracts include a 64m deal with Sheffield City Council. Kiers finances are in great shape. The company is expected to raise 30m in cash from land sales over the next two years. This adds to an already cash-rich balance sheet and will allow the company to make bolton acquisitions boosting Kiers growth potential. The shares are trading under 10 times forecast earnings and offer a healthy prospective yield of 4.6%. From a technical perspective, the shares are currently in the consolidation phase of a long-term uptrend, creating a good opportunity to buy-in before the next leg higher. 5 year price chart:

Galvan Research and Trading, CMA House, Newham Road, Truro, Cornwall, TR1 2SU Risk Warning Notice: Galvan Research And Trading Ltd is authorised and regulated by the Financial Services Authority (FSA). Whilst every attempt is made to ensure the accuracy of the information provided, no responsibility can be accepted for any inaccuracy. The information provided cannot be relied upon as constituting a recommendation, nor construed as any offer to sell, or any solicitation of any offer to buy investments. No liability is accepted for any loss whether direct or indirect, incidental or consequential, arising out of any of the information being untrue and / or inaccurate, except to the extent caused by the wilful default or gross negligence of Galvan Research And Trading, its employees, or which arises under the Financial Services And Markets Act 2000.

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T: +44 (0) 1872 262622 F: +44 (0) 1872 265326 E: mail@galvan.co.uk W: www.galvan.co.uk

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Galliford Try (GFRD)

Were staying in the construction sector, with another high-quality property company Galliford Try. Galliford has a bias towards the southeast of England. The property market in this area has been least affected by the financial crisis and currently has the strongest prices in the UK. The company has been busy buying up new plots of land at cheap market values. Galliford purchased all of the land it needs for development next year, as well as two-thirds of the plots planned for the year after. Whats more, they have already secured over 70% of next years business. When it comes to meeting the UKs desperate need for affordable housing, Galliford are in pole position. Theyve just secured a 347m regeneration project in Gateshead and have also been selected as a partner on three affordable housing agreements worth 584m over the next four years. The company has secured finance for the next four years in May and is using its strong cash flow to pay down its debt which is on course to fall to zero. Galliford pay a cash-beating yield of 4.5% and currently trade at an 8% discount to net asset value. When this is combined with a forecasted PE of less than 10, we believe the shares are a quality pick for any shrewd bargain hunter. Management clearly share our view that this stock is a real bargain at current levels. The CEO, Greg Fitzgerald, has just snapped up over 400,000 worth of shares. The shares broke above long-term resistance in April signalling the start of a new uptrend. Having recently retraced over 18% from its July highs of 540p we view this pullback has created a buying opportunity. 5 year price chart:

Galvan Research and Trading, CMA House, Newham Road, Truro, Cornwall, TR1 2SU Risk Warning Notice: Galvan Research And Trading Ltd is authorised and regulated by the Financial Services Authority (FSA). Whilst every attempt is made to ensure the accuracy of the information provided, no responsibility can be accepted for any inaccuracy. The information provided cannot be relied upon as constituting a recommendation, nor construed as any offer to sell, or any solicitation of any offer to buy investments. No liability is accepted for any loss whether direct or indirect, incidental or consequential, arising out of any of the information being untrue and / or inaccurate, except to the extent caused by the wilful default or gross negligence of Galvan Research And Trading, its employees, or which arises under the Financial Services And Markets Act 2000.

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T: +44 (0) 1872 262622 F: +44 (0) 1872 265326 E: mail@galvan.co.uk W: www.galvan.co.uk

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Tristel (TSTL)
The serious threat of superbugs such as MRSA is stronger than ever. And whilst the government is desperate to make spending cutbacks, they cannot afford to take ignore this issue. Tristel provide an essential role in the fight against these silent killers. They supply advanced infection control products for use in NHS, private and community hospitals. The company also make products for contamination control in the food and pharmaceutical industries. In other words they keep things clean and free of harmful bacteria. Tristel have a brand new growth strategy in which they are looking to focus on the Primary Care Trust and animal healthcare market. They are also keen to expand the export side of their business opening new offices in Germany and China. The Chinese market in particular, offers a massive growth opportunity. Tristel's Wipes System for the decontamination of delicate medical instruments is going through the registration process with the Chinese authorities to enable it to be marketed. Full approval of this product is expected by the end of the year. Tristels enjoyed five years of uninterrupted revenue growth. And although it has recently faced market pressure like everyone else, revenue growth is forecast to continue. The market has clearly failed to recognise the progress Tristel has made over the past five years, with the shares near the bottom of its five year range. 5 year price chart:

Galvan Research and Trading, CMA House, Newham Road, Truro, Cornwall, TR1 2SU Risk Warning Notice: Galvan Research And Trading Ltd is authorised and regulated by the Financial Services Authority (FSA). Whilst every attempt is made to ensure the accuracy of the information provided, no responsibility can be accepted for any inaccuracy. The information provided cannot be relied upon as constituting a recommendation, nor construed as any offer to sell, or any solicitation of any offer to buy investments. No liability is accepted for any loss whether direct or indirect, incidental or consequential, arising out of any of the information being untrue and / or inaccurate, except to the extent caused by the wilful default or gross negligence of Galvan Research And Trading, its employees, or which arises under the Financial Services And Markets Act 2000.

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T: +44 (0) 1872 262622 F: +44 (0) 1872 265326 E: mail@galvan.co.uk W: www.galvan.co.uk

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Dart Group (DTG)

Dart operate a low-cost charter air service throughout Europe. The company started back in 1971, flying fresh flowers from Guernsey to the UK mainland. Now they distribute fresh food and temperature controlled products to supermarkets and wholesalers throughout the UK. Dart also operate a small airline service called Jet2 and a package holiday company called Jet2Holidays. Dart published a strong set of numbers in June with significant jumps in turnover and profit. Its av i a t i o n d i v i s i o n h a s benefited from a significantly higher load factor and operating profits leapt by 98%. What s more, Darts balance sheet is rocksolid. Year-end net cash balances doubled to 112m. The outlook for next year is very bullish. Some brokers are forecasting sales of 650m and profits of 30m, largely due to a recovery in distribution. Dart is expanding its leisure airline for this summer with four additional aircraft, a new base at Glasgow and a growing package holiday programme. While the shares are near highs, the company trade on a tiny PE ratio of 7. Given the business momentum and impressive track record, the shares look cheap. 5 year price chart:

Galvan Research and Trading, CMA House, Newham Road, Truro, Cornwall, TR1 2SU Risk Warning Notice: Galvan Research And Trading Ltd is authorised and regulated by the Financial Services Authority (FSA). Whilst every attempt is made to ensure the accuracy of the information provided, no responsibility can be accepted for any inaccuracy. The information provided cannot be relied upon as constituting a recommendation, nor construed as any offer to sell, or any solicitation of any offer to buy investments. No liability is accepted for any loss whether direct or indirect, incidental or consequential, arising out of any of the information being untrue and / or inaccurate, except to the extent caused by the wilful default or gross negligence of Galvan Research And Trading, its employees, or which arises under the Financial Services And Markets Act 2000.

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