Are Today’s Updates From SABMiller plc, Pets At Home Group PLC And Smiths Group plc Game Changers For Investors?

Should you buy these 3 stocks after their latest news flow? SABMiller plc (LON: SAB), Pets At Home Group PLC (LON: PETS) and Smiths Group plc (LON: SMIN)

| 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.

Shares in diversified technology company Smiths Group (LSE: SMIN) have risen by around 5% today after it announced the $710m acquisition of Morpho Detection. It’s a US-based detection and security technology company, with Smiths Group planning to merge it into its existing detection segment.

The deal seems to be a good one for Smiths and fits with its goal of focusing investment on attractive technology-led areas that will position it for long-term growth. And with Morpho Detection having an operating margin of 18% as well as a highly capable management team, it should add value to the business over the medium-to-long term.

With Smiths Group trading on a price-to-earnings (P/E) ratio of 15.3, it may appear to be rather highly valued at the present time. However, with the company having excellent long-term growth prospects, a diversified income stream and a sound strategy, its shares look set to reverse their disappointing five-year period where they have fallen by 13%.

Long-term buy

Also in the news today is Pets at Home (LSE: PETS). Its shares are up by around 4% after the release of a positive trading statement for the full-year. Sales increased 2.1% on a like-for-like (LFL) basis, driven by strong performance from its merchandise and services division. In fact, the latter recorded a rise in LFL sales of 10% for the year and alongside growth in its VIP club membership of 1.3m, Pets at Home is moving in the right direction.

With Pets at Home being forecast to increase its bottom line by 5% this year and by a further 7% next year, it offers an upbeat outlook for its investors. Certainly, its shares aren’t particularly cheap due to them having a P/E ratio of 15.9 but with it having expansion potential and a high degree of customer loyalty, Pets at Home offers sound long-term growth prospects.

Increased momentum

Meanwhile, beverages company SABMiller (LSE: SAB) has released a positive trading update for the full-year ending 31 March. Encouragingly, SABMiller has reported increased momentum in the second half of the year across all of its regions, with noteworthy performance being delivered in Africa and Latin America. Those regions witnessed growth in net producer revenue of 6% and 5%, respectively during the final quarter of the year. And with SABMiller having a sound strategy to expand its diversified brand portfolio, it’s in good shape to continue its recent upbeat performance.

Of course, SABMiller is currently in the process of being acquired by AB InBev. As such, there’s limited upside and with it not yet being a done deal due to regulatory hurdles that must be overcome, it may be prudent to avoid buying SABMiller for the time being.

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 owns shares of Smiths Group. 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

Investing Articles

Could the JD Sports Fashion share price double in the next five years?

The JD Sports Fashion share price has nearly halved in the past five years. Our writer thinks a proven business…

Read more »

Bus waiting in front of the London Stock Exchange on a sunny day.
Investing Articles

If interest rate cuts are coming, I think these UK growth stocks could soar!

Falling interest could be great news for UK growth stocks, especially those that have been under the cosh recently. Paul…

Read more »

Investing Articles

Are these the best stocks to buy on the FTSE right now?

With the UK stock market on the way to hitting new highs, this Fool is considering which are the best…

Read more »

Petrochemical engineer working at night with digital tablet inside oil and gas refinery plant
Investing Articles

Can the Centrica dividend keep on growing?

Christopher Ruane considers some positive factors that might see continued growth in the Centrica dividend -- as well as some…

Read more »

Smiling family of four enjoying breakfast at sunrise while camping
Investing Articles

How I’d turn my £12,000 of savings into passive income of £1,275 a month

This Fool is considering a strategy that he believes can help him achieve a stable passive income stream with a…

Read more »

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

2 top FTSE 250 investment trusts trading at attractive discounts!

This pair of discounted FTSE 250 trusts appear to be on sale right now. Here's why I'd scoop up their…

Read more »

Smiling young man sitting in cafe and checking messages, with his laptop in front of him.
Investing Articles

3 things that could push the Lloyds share price to 60p and beyond

The Lloyds share price has broken through 50p. Next step 60p? And then what? Here are some thoughts on what…

Read more »

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

£1,000 in Rolls-Royce shares a year ago would be worth this much now

Rolls-Royce shares have posted one of the best stock market gains of the past 12 months. But what might the…

Read more »