More good news likely in Glynwed's pipeline.

Byline: MICHAEL WALTERS

NERVOUS? Depressed?

Uncertain about which way this volatile market is about to bounce? What you need is a good dose of Glynwed.

It makes a nice change from the fingers-crossed, soaraway growth stocks which appear pretty frequently in this column.

Much though I love them, it does us all good every now and then to opt for something a touch more conservative, something to sit alongside chemical companies Laporte and Elementis which were recommended a few weeks back.

In many ways, Glynwed (market value [pounds sterling]442m) has a similar story to tell. It is a drastically reshaped old economy company, once one of the doughty band of metal-bashers beloved of the 'value' investors. And one which repaid their devotion by losing them an awful lot of money down the years.

At the end of 1995, it was around 380p. Today, it is 188p, half the price and twice as nice.

The beauty is that most of the bits and pieces have gone, the basic business is in good shape, and there may be a bidder in the wings.

Something like 80pc of the near [pounds sterling]1bn revenue is in pipes, all sorts of pipes for everything you could imagine. And it makes them here, there and everywhere, but crucially in North America.

Last week's interim pre-tax profits (up from [pounds sterling]33m to [pounds sterling]52m on a trading basis) were significantly enhanced by earnings from IPEX, a [pounds sterling]224m North American pipe systems acquisition included for the first time.

That was purchased a year ago as a crucial part of a management decision to reposition, away from metals and into polyethylene pipes manufacturing.

Though polymer prices have been volatile, the company has been able to raise prices by concentrating on higher margin fittings.

The European business has been reshaped as well. Chief executive Tony Wilson is expecting the US economy to slow a touch, but sees massive opportunities as the US water industry replaces an ageing network of steel and concrete pipes.

The remaining 20pc of the business is in consumer and food service products, with industrial cooking equipment alongside Aga cookers and such.

That has been going well, and boosted interim operating profits from [pounds sterling]5m to [pounds sterling]7m. In July, Glynwed bought a Swansea bakery equipment company.

That looks more like a move to make the whole division more saleable, rather than a real dash for growth.

Even though Aga catches the eye with a trendy website, and Glynwed has other useful Internet operations, the management looks determined to concentrate on pipes. There, the idea is to become a predator, perhaps merging with a European big boy.

Wilson sees himself as a bidder rather than a target, but in May there was an approach from George Fischer, a Swiss company. Gossip goes that the Glynwed management refused to consider anything under 400p a share.

If a bidder should appear, hostilities could hardly start at under 300p.

Though the interim results were a touch disappointing, analysts reckon Glynwed could make around [pounds sterling]72m pre-tax this year, after eliminating one-offs, for earnings of perhaps 25p.

So 300p would suggest a PE of 12, modest enough should there be a bid.

One way or another, Glynwed could be coming to the boil. At 188p the shares sell on eight times earnings, with a useful yield of almost 7pc.

Downside looks modest, so long as the whole market does not collapse.

And the upside is simmering nicely.