Today’s Small-Cap Superstars? LSL Property Services plc, Matomy Media Group Ltd And Easyhotel PLC

Will these 3 small-caps soar in 2016 and beyond? LSL Property Services plc (LON: LSL), Matomy Media Group Ltd (LON: MTMY) and Easyhotel PLC (LON: EZH).

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Residential property services provider LSL (LSE: LSL) has today issued an upbeat trading update for the year ended 31 December 2015. In fact, with its performance in the second half of the year being particularly strong, the company now anticipates that underlying operating profit for the 2015 full year will be ahead of 2014’s level. In response, the company’s shares are up over 10% today.

Encouragingly, LSL’s estate agent division posted an increase in income of 5% in 2015, with exchange income up by 1%, lettings income rising by 12% and financial services income increasing by 16%. It continues to seek further acquisitions and its strategy of both expanding its number of branches and also maximising operating profit per branch seems to be paying off.

With LSL forecast to increase its bottom line by 16% in 2016, investor sentiment could remain strong over the medium term. And with the company having a price-to-earnings growth (PEG) ratio of just 0.5, it seems to offer growth at a reasonable price as well as a generous yield of 5.6%.

Digital delight

Also posting strong gains today is digital advertising company Matomy Media (LSE: MTMY), with its shares being up 8% following the release of a pleasing update. Encouragingly for its investors, the company will meet the guidance issued in August for the 2015 financial year, with earnings before interest, tax, depreciation and amortisation (EBITDA) expected to be between $25.3m and $25.7m, with strong growth in the second half of the year significantly outpacing that of the first half of the year.

Looking ahead, Matomy Media is confident in the outlook for the digital advertising sector. While the first half of 2015 was challenging, it believes that the rapid evolution of the industry and its diversified business model provide significant growth opportunities. And with earnings growth of 72% being pencilled-in by the market for 2016, investor sentiment in the stock could continue to improve following the 49% fall in Matomy Media’s share price in the last year. With a PEG ratio of 0.1, it appears to offer substantial capital gains, although it’s likely to be relatively volatile.

Easy does it

Meanwhile, shares in Easyhotel (LSE: EZH) are up by 10% today despite no significant news flow being released by the company. This follows a 45% rise in the last three months and shows that investor sentiment may be warming to the super-budget hotel chain.

Furthermore, with Easyhotel having released an encouraging trading update just last week that stated the company’s performance is on track, its long-term outlook remains relatively upbeat. For example, it has been granted planning permission for new developments in Manchester and Liverpool, with the company aiming to establish further hotels in gateway cities across the UK and Europe.

Although Easyhotel’s concept could work, its current valuation indicates that it may be a stock to watch rather than buy after its recent share price rise. For example, it trades on a price-to-earnings (P/E) ratio of 92 and even though its growth prospects may be bright, it may be prudent to await a keener valuation before buying.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Peter Stephens has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Mature couple at the beach
Investing Articles

6 stocks that Fools have been buying!

Our Foolish freelancers are putting their money where their mouths are and buying these stocks in recent weeks.

Read more »

Black woman using loudspeaker to be heard
Investing Articles

I was right about the Barclays share price! Here’s what I think happens next

Jon Smith explains why he still feels the Barclays share price is undervalued and flags up why updates on its…

Read more »

Investing Articles

Where I’d start investing £8,000 in April 2024

Writer Ben McPoland highlights two areas of the stock market that he would target if he were to start investing…

Read more »

View of Tower Bridge in Autumn
Investing Articles

Ahead of the ISA deadline, here are 3 FTSE 100 stocks I’d consider

Jon Smith notes down some FTSE 100 stocks in sectors ranging from property to retail that he thinks could offer…

Read more »

Young female business analyst looking at a graph chart while working from home
Investing Articles

Why I think Rolls-Royce shares will pay a dividend in 2024

Stephen Wright thinks Rolls-Royce shares are about to pay a dividend again. But he isn’t convinced this is something investors…

Read more »

Investing Articles

1 of the best UK shares to consider buying in April

Higher gold prices and a falling share price have put this FTSE 250 stock on Stephen Wright's list of UK…

Read more »

Person holding magnifying glass over important document, reading the small print
Investing Articles

The market is wrong about this FTSE 250 stock. I’m buying it in April

Stephen Wright thinks investors should look past a 49% decline in earnings per share and consider investing in a FTSE…

Read more »

Black father and two young daughters dancing at home
Investing Articles

1 FTSE 250 stock I own, and 1 I’d love to buy

Our writer explains why she’s eyeing up this FTSE 250 growth phenomenon, and may buy more shares in this property…

Read more »