Investor/An insider's guide to the market: International economic data releases have continued to support the "Goldilocks" view of global economic developments - strong economic growth without undue inflationary pressures.

Last week's news on inflation from the US was in line with market expectations. The personal consumption expenditure deflator, which is the Federal Reserve's preferred measure of inflation, continues to show that US inflation is running at a 0.2 per cent monthly rate.

Market participants are watching inflation news very carefully at present, as it will be the key determinant of whether the Fed holds US interest rates at 5 per cent or whether it raises rates further. Market analysts seem to be evenly split as to what the Fed is likely to do in coming months.

In Japan, the economy seems to be maintaining its positive momentum. The Japanese unemployment rate remained at a seven-year low of 4.1 per cent in April and industrial production grew at a year-on-year rate of 3.8 per cent.Household spending, on the other hand, was weaker than expected in April, falling by 2 per cent year-on-year.

Meanwhile, in Germany a survey by Gfk, a market institute, indicated consumer confidence had risen to its highest level in four and a half years. The survey revealed that consumers' views on the economic outlook, their income expectations and their willingness to buy are all on an improving trend. The 2006 World Cup this month should underpin this optimism over the summer, particularly if the German team does well.

In Ireland, the first batch of SSIAs are about to mature and are sure to keep the Irish consumer in buoyant form for the next year. The flow of corporate news from Irish-quoted companies remains healthy.

Several brokers have recently upgraded their profit forecasts for Kingspan and its earnings are now expected to grow by 16 per cent in 2006. Kingspan is one of the more dynamic mid-capitalisation Irish quoted companies, with a market capitalisation of €2.2 billion.

Kingspan produces insulation products and other building materials in a range of product areas. These include composite panels, insulation boards, raised-access floors and environmental containers.

These are fast growing niches and their medium-term growth prospects are attractive in all of them, driven by legislative and regulatory changes as well as cost advantages and efficiency benefits associated with many of these products.

Kingspan has high market shares in its product areas in Ireland and the UK and it has a growing presence in continental Europe (including some eastern European markets) and the US.

Last year it acquired Century, which is the clear leader in the offsite residential timber frame construction market in Ireland. It has also established a foothold in the UK where it recently won a high-profile contract to build low-cost, entry-level housing.

The UK is now a very important market for Kingspan and accounts for approximately 63 per cent of sales. Ireland and Europe account for 29 per cent of sales, with the balance mainly in the US. Share price performance in 2005 was exceptional, and it has continued to outperform the Irish market in 2006.

As a result, the 2006 price earnings ratio (Per) is now at a demanding 18.6.

However, given Kingspan's strong position in growing markets and the likelihood that newsflow emanating from the company will continue to be positive, Investor expects that the shares will continue to perform well.

Another mid-capitalisation stock (with a market capitalisation of €1.6 billion) that has a substantial UK business is DCC, with half its profits generated there.

DCC is engaged in marketing and distributing a range of products, chiefly IT, energy and healthcare. Its divisional profit split breaks down as follows: energy 44 per cent; IT 24 per cent; food and beverages 15 per cent, healthcare 13 per cent and environmental 4 per cent.

For the year to the end of March 2006, DCC achieved earnings growth of 15 per cent, which is a credible performance, given that it experienced difficulties in its IT division during the year.

Despite reporting this good financial performance, the share price has lagged the Iseq Overall index in recent months. It is now trading on a Per of approximately 12 and at this level it offers excellent long-term value.

If overall market conditions continue to be volatile in coming months, then investors should have stocks such as Kingspan and DCC on their list of potential stocks to purchase on overall market weakness.

Investor says . . .

If overall market conditions remain volatile, investors should add DCC and Kingspan to their portfolio, as they have recorded strong earnings growth and offer good long-term value.