Alkane Energy (LON:ALK) (ALK, 15.5p, £14.43m) has extended the tolling arrangement with GDF Suez that sees its electricity generation capacity use piped in gas rather than coal mine methane. ALK has extended the contract by 18 months to march 2012 which uses excess capacity as its Markham and Shirebrook operations - so generating an estimated income of some £0.3m in the first full year. The contract doubles capacity to 10MW, thereby potentially doubling the revenues to be earned. With the outlook based on increasing electricity prices we maintain our BUY recommendation.  

Digital Marketing Group Plc (LON:DIGI) Group (DIGI, 27.75p, £20.58m) is the UK’s largest digital marketing specialists.  The AGM statement reports trading is currently in line with management expectations. As expected market conditions have improved slowly and the recovery is modest. The collaboration agreement with UM, the global media planning and buying agency, will increase the number of clients the group work with internationally. The launch of 20:20 Connect, the new business developed to provide a comprehensive range of mobile communications and mobile commerce services, will help enhance organic growth. All in all, we are encouraged by the statement.  We believe a shift in spending in favour of online and mobile channels and away from traditional media will benefit the group in the long term. The market forecasts 2010 PBT of £6.0m and EPS of 5.1p and in 2011 PBT of £7.2m and EPS of 6.1p. The stock is rated on a mere 5.4x 2010 earnings and 4.5x 2011 earnings. We continue to believe the large discount to the sector is unwarranted. We maintain our BUY recommendation but reduce our target price to 33.55p, equivalent to 5.5x 2011 earnings.  

Regenersis (LON:RGS) (RGS, 36.75p, £16.47m) has secured a four year, multi-million pound contract with DHL Supply Chain. The group will provide repair and refurbishment of mobile devices, as well as the systems to drive down total service costs.  The latter coupled with DHL's supply chain leadership in reverse logistics, will mean that telecom customers can now move to a market leading service combined with reduced inventory levels.  Management expect the new end-to-end technical service will raise the industry benchmark. We are encouraged by the contract win, which highlights the group’s ability to develop new service models for existing customer. Trading on a 2010 and 2011 PER of 3.8x and 3.3x respectively, a discount…

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