Nationwide Accident Repair Services - 93p

In the past we have highlighted Just Car Clinics as one of our favourite picks.

That company has performed well and the share price has held up encouragingly despite the weak broader marker. Another accident repair services business is listed on AIM, which is also well worth considering.

Nationwide Accident Repair Services (NARS) has generally looked poor value in comparison to Just Car Clinics but having seen its share price slip back, we now believe the former is worthy of investment.

NARS has reported its results for the six months to June 30, 2008 and solid progress was delivered. Revenue increased by 16per cent to £88.3 million and this fed through into a profit before tax of £3.9m versus £3.4m a year earlier. Earnings per share rose by 14per cent from 5.6p to 6.4p and this allowed an increased interim dividend of 1.7p to be paid.

The total dividend for the year is expected to be around 5p, which provides a very useful yield.

The balance sheet is also strong, with net cash of £4.6 million as at 30 June 2008. Given that the current market capitalisation is only a shade over £40 million that is an important resource, especially in the current environment where debt can be a burden.

We remain keen on Just Car Clinics but NARS provides a higher yield and benefits from its net cash position.

NARS is also around six times the size of its peer in terms of both profit before tax and market capitalisation, meaning the shares should be more liquid.

The industry in which the companies operate should not be impacted too badly by the recession and the lack of appetite for buying into any smaller companies appears to have presented a good opportunity to invest into NARS at a price which represents very good value.

In terms of the broader stock market we remain cautious given the volume of negative economic news which is hitting the headlines on a daily basis and would not be surprised to see further falls in the coming months.

However, there are trading opportunities given high volatility, with even blue chip shares fluctuating wildly at times.

The poor rate of interest available on bank accounts also means that shrewd investors have been looking closely at gilts and corporate bonds as a home for their cash.

WARNING: Opinions expressed are the writers’ judgments at the time of writing. The information does not constitute a personal recommendation and readers should seek their own professional advice as to the suitability of the investments.