One to Watch: Added value assets

Gulfsands Petroleum 273.25p +7.5pScotsman says BUY

GULFSANDS Petroleum is an exploration and production company with assets in Syria, the United States and Iraq. The company's key asset is Block 26 in the north-east of Syria.

Within Block 26, the Khurbet East field has already entered limited production and has estimated reserves of nearly 60 million barrels of oil equivalent. Early production from the field has been encouraging and may result in an upgrade to the aforementioned 60 million barrels. The company plans to drill four or five relatively low-risk exploration wells over the next six to 12 months.

While none of these is likely to be company making, they should ensure a steady stream of positive news flow. Given the already well-developed infrastructure in the area, any successful discoveries in the future will not require large sums of additional capital expenditure, so even small finds are economic.

Gulfsands' healthy balance sheet will allow the company to finance the full development of Khurbet East and the planned drilling campaign.

Gulfsands' assets in the US are based in the shallow waters of the Gulf of Mexico and are all relatively mature. These assets were used to fund the early stages of the Syria exploration programme and are likely to be divested when US gas prices recover. Gulfsands' operations in Iraq remain at an early stage thanks to the uncertain political environment and continuing security risk in the area.

Currently trading at a discount to its core NAV, we believe that the current stock price does not fully reflect the value of Gulfsands' producing assets. Additionally, no value has been attached to the potential success of the 2010 exploration campaign and any positive news flow here would be well received by the market.

• This article is for information and discussion purposes and does not form a recommendation by the manager to invest or otherwise.

Dairy Crest

341.5p +3.8p

Broker says BUY

RBS Equities has upgraded Dairy Crest from "hold" to "buy" after the third quarter results from the maker of Cathedral City cheese and Utterly Butterly spread were "slightly stronger than expected, with good profitability".

RBS added: "Recent stock weakness looks unjustified: we raise our target price to 430p."

Cable & Wireless

146.4p +3.1p

Broker says SELL

ANY strength in Cable & Wireless's share price should be seen as an opportunity to sell, according to Evolution Securities.

The broker noted: "While dividend cuts were never likely today, payments remain uncovered and we believe de-merger will highlight underlying poor cash generation."