Can Torotrak plc (-82%), French Connection Group (-67%) & Ruspetro PLC (-90%) Ever Pull It Back?

Is there any way back for Torotrak plc (LON: TRK), French Connection Group (LON: FCCN) and Ruspetro PLC (LON: RPO)?

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.

It pains me to see Torotrak (LSE: TRK) shares down so badly, with a fall of 82% since their recent peak in April 2014, and down a lot further since the heady days of 2011 when hopes for the firm’s technology were high — just those few years ago the shares were fetching more than 60p apiece, while today you can get them for only 4.9p.

The company develops variable transmission systems for vehicles, emissions reduction and fuel efficiency technology, which would be a significant energy saver in these critical times of global warming — and it’s an example of the great British engineering tradition. The problem is, it’s been a very long road between drawing board and commercial success, and the company has been burning cash for years — and it’s needed a £12.4m share placing already this year.

Foecasts suggest Torotrak could be very close to break-even by the year ending March 2017, and there’s surely a possibility of profit the year after — but as recovery situations go, this one still looks too risky to me.

The world of fashion is a very risky one too, as French Connection Group (LSE: FCCN) shareholders know to their cost. The high-street chain has seen its share price lose two-thirds of its value since May 2014, to just 30.5p today, after the company recorded further ongoing losses at its interim stage this year — in fact, the shares fell 8% on results day itself as disappointment grew in line with the firm’s increasing losses.

The question is, with the firm restructuring and trying to reshape itself as a smaller but fitter business, could this be time to buy in the hope of a share price recovery? Well, French Connection has no debt — in fact, it was sitting on net cash of £23.2m at the halfway stage. So it doesn’t seem to be in any danger of going under in the near term. Investing in loss-makers in the hope of recovery is not my style, but if it is yours then you might be well advised to wait and see how Christmas trading goes this year.

Ruspetro (LSE: RPO) has suffered from the double-whammy of being a loss-making oil explorer at a time when oil prices have been plunging, and operating in Russia when that country’s international status is being steadily downgraded to pariah levels. The result has been a 90% fall in the share price in a little over two years, to just 4.3p today.

At the interim stage we heard that average daily production had risen by 16% to 3,914 bopd, though revenues fell from $27.8m to $24m in the period due to the oil slump. It sounds like the company has sufficient funding in place to be reasonably safe in the short term, and if an oil price recovery comes along in time it could be a nice recovery prospect — but for me, there really are some considerably less risky oil explorers out there if that’s what floats your boat.

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.

Alan Oscroft 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

Affectionate Asian senior mother and daughter using smartphone together at home, smiling joyfully
Investing Articles

How I’d invest my first £20k ISA to target £4,900 a year from dividend shares

Looking for dividend shares in a new Stocks and Shares ISA, and want diversification too? Here's how I'd go about…

Read more »

Passive income text with pin graph chart on business table
Investing Articles

Yields of up to 7%! I’d consider boosting my income with these FTSE dividend stocks

The London market has some decent-looking dividend stocks right now, and I’m tempted by these two for growing income streams.

Read more »

Young mixed-race couple sat on the beach looking out over the sea
Investing Articles

I’d put £20K in an ISA now to target a £1,900 monthly second income in future!

Christopher Ruane shares why he thinks a long-term approach to investing and careful selection of shares could help him build…

Read more »

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 »