Gamble of the week: A resurgent electronics maker

Stadium has nothing to do with sports facilities. The largest of its two divisions (accounting for 61% of profits) provides contract manufacturing (of printed circuit boards and the like) to the electronics industry. The rest of its profits come from developing power supplies are used in fire and security applications, LED lighting and healthcare. The group employs 900 staff at its sites in Hartlepool, Rugby and China and generated turnover of £44.9m in 2011 (41% of it overseas).

Recent trading has been patchy, which explains the miserable rating. In July, CEO Stephen Phipson commented that first-half sales would be down on last year, thanks to the weak economy and the ending of several legacy contracts. However, there is room for optimism.

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So full-year profits are still on track, albeit weighted towards the second half of the year. And with a £2.6m cash pot, Phipson is considering strategic acquisitions to accelerate the group's transformation into a provider of niche technologies, offering outsourced electronics manufacturing.

Stadium Group (Aim: SDM)

Being smaller than many of its rivals, it may struggle to compete on some big outsourcing deals. And it could be hit by another downturn, currency movements or counter-party risk. That said, the firm is successfully implementing its own self-help measures to maintain margins. Meanwhile, a beefed-up sales team should bring in new clients and reduce the firm's reliance on a few chunky accounts. Interims are out on Tuesday 4 September.

Rating: SPECULATIVE BUY at 64p (market cap £19m)

Paul gained a degree in electrical engineering and went on to qualify as a chartered management accountant. He has extensive corporate finance and investment experience and is a member of the Securities Institute.

Over the past 16 years Paul has held top-level financial management and M&A roles for blue-chip companies such as O2, GKN and Unilever. He is now director of his own capital investment and consultancy firm, PMH Capital Limited.

Paul is an expert at analysing companies in new, fast-growing markets, and is an extremely shrewd stock-picker.