Direct Line to trouble

It could be time to take profits in Direct Line Insurance (DLG) following a stellar run. At 262.3p the £3.9 billion cap stands near record highs but with competition increasing, especially in motor cover where premiums fell 10% in the first quarter, there could be hard times ahead. (MD)

Johnson beds in new business

The £22 million acquisition of Bourne Services (3 Mar) takes dry cleaning-to-workwear specialist Johnson Service (JSG) into the hotel linen rental market and adds customers including Whitbread (WTB) and Accor (EPA:PAR). This provides another growth leg to its existing businesses which are enjoying a renaissance. (DC)

Swoop on Swallowfield

Cosmetics-to-toiletries maker Swallowfield (SWL:AIM) looks an interesting microcap turnaround temptation. Sales and margins are trending higher and new CEO Chris How’s clearly communicated strategy - ‘Building a Better Swallowfield’ - should boost growth and enhance profits through cost cutting and a focus on higher margins. (JC)

AGA heating up

Prospects at premium branded cookers manufacturer AGA Rangemaster (AGA), behind the iconic British cast iron oven, are heating up on rising consumer confidence and a housing market revival. A confident full-year results statement tomorrow (7 Mar) should sustain the rally. (JC)

Harness Digital’s potential

Acquisitive instrument maker Scientific Digital Imaging (SDI:AIM) remains an interesting recovery play, despite the 21% correction in the past week. Trading on just 4.6 times the consensus call for EPS of 4p to April 2015 investors should hold tight ahead of what should be reassuring finals in July. (MD)

Dip into Synectics

Reduced profit guidance for this year has hit surveillance group Synectics (SNX:AIM). At 430p, it now trades on 13.4 times 2014 forecasts which is cheap compared to peers. Take advantage of price weakness as this may only be a temporary blip for the £76 million cap. (DC)