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Can these momentum stocks keep on charging?

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After a shock profit warning in November punished its share price, sausage casings maker Devro (LSE: DVO) has steadily plotted its way higher again in recent months.

A positive trading statement this week helped the business gain further ground and, while the business conceded some gains in end-of-week trading, the business still rose 11% during Monday-Friday.

Although thin on detail, Devro announced that trading during the year to April 26 “was in line with the Board’s expectations, with total sales volumes ahead of the equivalent period last year.” As a result the Glasgow business affirmed its expectations for the full-year

The news comes as huge relief to tetchy investors following the disaster that was 2016, with signs increasing that sales are hotting up in growth markets like China. And Devro is investing heavily to latch onto its fast-growth regions and has opened new plants in the US and China in the past year alone.

With the firm’s newly launched ‘Devro 100’ programme also aiming to cut costs, improve sales processes and to launch a stream of new products from this year, the profits picture at Devro is looking brighter than it has for some time.

Meaty upside

And despite Devro’s share price ascent of recent months, I believe the food giant still provides exceptional value for money.

The City’s army of abacus-bashers expect earnings to rise 2% and 14% in 2017 and 2018 respectively. And such forecasts leave Devro dealing on a forward P/E ratio of 14.8 times,

Meanwhile, Devro’s expected return to growth is anticipated to lead to the resurrection of its progressive dividend policy. A reward of 8.8p per share shelled out for the past several years is expected to rise to 9p in 2017 and 9.1p next year. And this leaves the stock carrying a monster 4.5% prospective yield.

I reckon these very-undemanding valuations, allied with Devro’s improving top-line performance, could keep driving the share price skywards.

Big riser

Tech titan Computacenter (LSE: CCC) also made impressive gains during the past week, the stock adding 12% in value following a positive reaction to latest trading details on Monday.

Computacenter advised that “while much remains to be done to complete the year, we believe that the Group’s performance for 2017 as a whole will exceed current market expectations due to buoyant market conditions for new investments in technology.”

While Germany was the standout performer during January-March, Computacenter also witnessed “steady progress” in Britain and France in the period, it said.

The company saw group sales rise 16% in the period (or 9% at constant currencies) during the first quarter, and while weak conditions in the first half of last year may have flattered the latest release, Computacenter should keep delivering decent revenues growth as digitalisation picks up across all its regions.

So although Computacenter is expected to see earnings stagnate in 2017, growth is expected to accelerate thereafter starting with a 3% advance in 2018. Given the huge structural opportunities opening up to the business, I reckon a forward P/E ratio of 15 times is great value and could lead to additional share price strength.

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Royston Wild has no position in any shares mentioned. The Motley Fool UK owns shares of and has recommended Devro. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.