Are Vodafone Group plc, Talktalk Telecom Group PLC & Laird PLC Set To Soar?

Is now the perfect time to pile into Vodafone Group plc (LON: VOD), Talktalk Telecom Group PLC (LON: TALK) and Laird PLC (LON: LRD)

| 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.

2015 has been a hugely challenging year for Talk Talk (LSE: TALK). That’s because its shares have fallen by 25% since the turn of the year as a result of the hacking of its systems which compromised customer data. This has led to declining investor sentiment, with many investors being of the view that the size of Talk Talk’s customer base could come under pressure as a result of reputational damage.

Clearly, this is a major risk for the company and, realistically, it would be of little surprise if new customers are difficult to acquire over the medium term. However, this could present an opportunity to buy a slice of the business while it is trading at a discounted price. For example, Talk Talk now trades on a price to earnings growth (PEG) ratio of 0.4, which indicates that there is a sufficiently wide margin of safety on offer to merit purchase at the present time.

Certainly, there may be further challenges ahead and trading updates may point to relatively poor performance in the short run. But, with the quad play market set to offer strong long term growth, Talk Talk seems to be a good value, albeit risky, buy for the long term.

Meanwhile, technology company Laird (LSE: LRD) has enjoyed a strong year, with it rising by 10% versus a fall of 4% for the FTSE 100. Due to Laird’s strong earnings growth rate, however, its shares still offer excellent value for money with them trading on a price to earnings (P/E) ratio of just 15.6 at the present time. When the company’s growth forecast of 10% for 2016 is taken into account, this indicates that they are worth buying.

Furthermore, Laird continues to be a sound income play. For example, it currently yields 3.7% despite paying out just 54% of its profit as a dividend. This, plus its upbeat earnings growth rate, indicates that dividend growth is likely to be fast-paced in future years This is likely to make Laird a popular stock among investors who are set to be yield-hungry for a number of years if the Bank of England’s interest rate outlook proves to be correct.

Similarly, Vodafone (LSE: VOD) is a top notch income stock, with the telecoms company currently yielding 5.2%. Looking ahead, dividend growth is possibly the brightest it has been for a number of years at Vodafone, since the company’s European exposure seems likely to deliver a positive outcome. That’s because the single-currency region’s looser monetary policy, aided by quantitative easing, is likely to provide a major boost to its performance in 2016 and beyond, thereby aiding Euro-focused companies such as Vodafone.

Evidence of this potential can be seen in Vodafone’s forecast earnings growth rate of 20% for 2016, which has the scope to boost investor sentiment in the stock. And, with Vodafone having a sound balance sheet, having undertaken major investment in its network and also moving into new product lines, now could be an opportune moment to buy a slice of the business for the long term.

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 Laird, TalkTalk Telecom Group plc, and Vodafone. 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

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 »

Investing Articles

Are HSBC shares a FTSE bargain? Here’s what the charts say!

There are plenty of dirt-cheap FTSE 100 banking stocks for investors to choose from today. Our writer Royston Wild believes…

Read more »

Three signposts pointing in different directions, with 'Buy' 'Sell' and 'Hold' on
Investing Articles

Just released: Share Advisor’s latest ‘Hold’ recommendation [PREMIUM PICKS]

In our Share Advisor newsletter service, we provide buy, sell, and hold guidance for our universe of recommendations.

Read more »

Investing Articles

Investing £5 a day could help me build a second income of £329 a month!

This Fool explains how £5 a day, or one less takeaway coffee, could help her build a monthly second income…

Read more »

Smart young brown businesswoman working from home on a laptop
Investing Articles

2 FTSE income stocks investors should consider buying in April

Income stocks are a great way to build wealth. Our writer details two picks she believes investors should consider snapping…

Read more »

Investing Articles

What might the 5-year price chart tell us about BT shares?

Christopher Ruane considers what clues the long-term performance of BT shares might offer him about business performance and whether to…

Read more »

One English pound placed on a graph to represent an economic down turn
Investing Articles

Dividend yields of nearly 10%! I’d buy both these bargain FTSE 100 shares

Our writer highlights a pair of income shares from the flagship FTSE 100 index that each yield nearly 10% and…

Read more »