Brulines Group - 98p

Brulines Group’s core operation is the dispense monitoring division which collates and analyses data for pub owners, principally measuring how much liquid is being dispensed and comparing this against legitimate deliveries.

Dispense monitoring units are sold to customers and the company usually enters into a three to six-year contract to provide data management and associated services.

This appears to be a very attractive niche market and the company manages information from more than a third of all pubs in the UK.

It would be difficult for serious competitors to mount a challenge to the company given the position it has built up.

The company joined AIM in 2006 and since that time it has expanded its offering through a series of acquisitions.

Further progress on the acquisition front is a possibility and as a result of a placing in December 2008, which raised £4.4 million after expenses, the company is well funded.

There is an impressive list of institutional shareholders which is somewhat uncommon for a company of this size. This suggests confidence that the business will continue to grow significantly.

Brulines has a very solid track record, consistently increasing revenue and profits in recent years.

A progressive dividend policy is in place, with 5.35p being paid out last year and analysts forecast a payout of 5.6p or 5.8p in the current year, which translates into a good yield at the current share price. In terms of profitability the company also looks cheap. Pretax profits are expected to break through the £5m barrier this year, which makes the market capitalisation of £27.4m look too low, especially given the net cash position.

Chief Executive James Dickson holds a stake of almost 13per cent, which means that the goals of senior management and shareholders are closely aligned.

There is a positive air about the business and a belief that it is worth more than the current share price would suggest.

Results for the year to March 2009 were released on June 9 and provide evidence that the business continues to do well despite weakness in the economy.

Given that the placing was supported at 125p late last year, there is definitely scope for the share price to recover to around that level in the coming months. Buy. 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.