Should you buy Wincanton plc (+9%), Future plc (+8%) and Xcite Energy Limited (+10%) after today’s huge share price moves?

Are these 3 risers ripe for investment? Wincanton plc (LON:WIN), Future plc (LON: FUTR) and Xcite Energy Limited (LON: XEL)

| 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.

Increasingly confident

Shares in Wincanton (LSE: WIN) have risen by as much as 9% today, despite no significant news flow being released by the company. The supply-chain solutions specialist is most likely up by such a large extent due to a general improvement in investor confidence, now that a vote to remain in the EU seems more likely after recent polls.

A vote to ‘remain’ would probably be good news in the short run for Wincanton, due to its UK-focus, and the restoration of some ‘certainty’ that a vote for the status quo would bring — certainly compared to the months or even years of uncertainty that a ‘leave’ vote would produce. Encouragingly, the company seems to be making strong progress and its recent results show that the challenges which it has faced in recent years may be easing somewhat. Evidence of this can be seen in Wincanton’s decision to reintroduce dividends, which indicates that management is becoming increasingly confident in the long term prospects for the business.

With Wincanton forecast to post a rise in its bottom line of 8% next year and its shares trading on a price-to-earnings (P/E) ratio of just 9, it seems to be an excellent long term buy.

A potential boost

Also rising today are shares in media group  Future (LSE: FUTR), which announced the acquisition of Miura, the parent company of Imagine Publishing. The total consideration is £14.2m and will be paid for via the issue of 179.5m new shares in Future. With the deal representing a logical step for Future in terms of increasing its scale and improving operational efficiencies, it seems to be a good move for the company’s long term profitability.

With Future forecast to increase its bottom line by 60% in the current year and by a further 163% next year, it seems to be on the cusp of drastically improved financial performance. This has the potential to boost investor sentiment in the stock, and Future’s share price fall of 21% since the start of the year could easily be reversed. That’s especially the case since it trades on a price-to-earnings growth (PEG) ratio of just 0.1, which indicates that it offers staggering growth prospects at a very reasonable price.

Struggling with debt

Meanwhile, shares in Xcite Energy (LSE: XEL) have soared by as much as 10% today, even in the absence of any news from the North Sea oil explorer. Clearly, the current period is a highly uncertain one for Xcite, with there seemingly being a good chance that a portion of its debt will be swapped for equity in the near term. That’s because it is struggling to repay its debt and such a move would squeeze the returns for existing shareholders.

Certainly, Xcite’s Bentley field has considerable long term profit potential, but with the oil price having fallen dramatically, Xcite has been unable to find a buyer or partner for the prospect. And with its finances in such a difficult position, it seems wise for investors seeking a small-cap oil exploration business to look elsewhere.

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

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 »

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 »