Last month Royal & SunAlliance (RSA) released an impressive first quarter result. Gains were achieved in nearly every significant reporting category. RSA attributed the solid performance to their balanced portfolio of products, operational improvements and strong underwriting/claims discipline. Given the results currently being achieved, and the quality of the management team, we believe it is only a matter of time before the shares undergo a re-rating.

Earlier this week, Dragon Oil (DGO) confirmed that they had received a preliminary approach that could have resulted in a partial takeover offer. However, yesterday management confirmed that these discussions had been abandoned. These developments have done nothing to dampen our enthusiasm about Dragon's future prospects.

The world's fifth largest insurance group, Aviva (AV), recently released first quarter new business results. Although turnover was flat in the UK, we were heartened to observe new business sales of long-term savings (life, pensions and investments) increase 17 percent to £6,134 million. We believe robust growth in continental Europe and Asia holds particular promise as distribution channels are developed along side a strong product offering and improving investor sentiment.

In recent years the music industry has faced challenging trading conditions brought on by rapid changes in technology. Despite all of its promise, digital music has until recently been a thorn in the side of music distribution businesses because of the problems associated with piracy. We believe however that legitimate digital music is now establishing itself in a significant manner in the marketplace.

Krispy Kreme Doughnuts (US: KKD) is a leading US manufacturer of donuts. The last few years have however been a tumultuous time for the company. After pursuing an ambitious expansion plan, earnings have suffered due to falling margins and softening demand. To compound matters, the company has delayed filing financial statements with the SEC (Securities and Exchange Commission) whilst an investigation of accounting procedures is conducted.