Recently floated building company, Siteserv, is one of three small stocks that Goodbody Stockbrokers recommend as leading contenders to deliver value next year. In a review of Irish "microcap" companies, the firm is also backing software developer, First Derivatives, and digital camera equipment manufacturer, Andor, to repay investors' support in 2007.

Analyst Philip O'Sullivan looked at 14 companies with market capitalisations of less than €100 million for the report. He says that ignoring small players like these in recent years has caused investors to miss opportunities. "For example, since our first microcaps report in November 2004, three of the companies featured have seen their share prices appreciate by at least 300 per cent against an ISEQ increase of 52 per cent over the same period," he says.

Siteserv supplies scaffolding and fencing to the building industry. It floated three weeks ago and has since bought Holgate Fencing. Mr O'Sullivan sets a target of €1 for the stock, which closed last night at 83 cent.

Newry-based First Derivatives provides consultancy, custom software design, systems integration and web design for sophisticated financial markets.

Mr O'Sullivan says it numbers eight of the world's top 10 investment banks on its client list.