Three underrated shares to buy now

They may not make the headlines but, with new products and lucractive contracts in the pipeline, these three stocks are exciting prospects. City analyst John Cornford picks the shares you should buy now before other investors catch on.

Photo-Me International (PHTM, 89p)

I tipped this firm in November, when it was the subject of bid talks. These have since been called off, but I still rate the shares a buy. The firm, which makes photo-processing equipment and operates photobooths, now plans instead to return significant surplus capital' (and perhaps spin-off parts of its business) as a better way of maximising shareholder value.

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