Standard Chartered
It’s been a disappointing year for investors in Standard Chartered (LSE: STAN) (NASDAQOTH: SCBFF.US), with the Asia-focused bank today releasing its second profit warning of the year. Indeed, the bank has lowered guidance for the second half of 2014 after reporting a fall in operating profit of 16% for the most recent quarter, caused mainly by an increase in bad loans and a restructuring of its South Korean business.
Despite this, shares in Standard Chartered still offer upside potential and, after a fall of 8% today, offer even better value for money. For example, they trade on a price to earnings (P/E) ratio of around 10 and, with the Asian economy continuing to have strong long term potential, the future could be much brighter for the bank than the past.
Certainly, more bad loans could be on the near-term horizon and trading conditions could remain challenging in the short run. For long-term investors, though, recent share price weakness could amount to a great buying opportunity.
Synthomer
Another disappointing update was released today by chemical maker, Synthomer (LSE: SYNT). Its update amounted to a profit warning, since guidance for the full year has been lowered and, as a result, shares have slumped by as much as 11% today.
The main reason for the cut in guidance is lower demand from construction markets across Europe and, perhaps more importantly, the company has warned that further reductions in forward guidance could be on the cards. With the European economy showing little sign of life, it would be unsurprising for this to take place.
Despite this, Synthomer remains profitable and, trading on a P/E ratio of just 10.8 (after the cut in guidance) it still appears to offer good value for money.
Oilex
After falling by around 14% yesterday, shares in Oilex (LSE: OEX) are down another 10% today as the company’s Cambay-77H well is about to commence its production test.
According to Oilex, the successful completion of this test could enable gas production to commence at the Cambay joint venture and, in doing so, the company would be taking a major step towards becoming cash neutral. Clearly, this would be a significant development for Oilex, since cash burn is unsustainable over the medium to long term.
As a result, the outcome of the test will be crucial to the success of the company and, although sentiment has weakened of late and there has been a possible sell-off of shares, its successful completion could provide a short-term boost to Oilex’s share price.
