Is Now The Perfect Time To Buy Genel Energy PLC, Monitise Plc & LGO Energy PLC?

Should you buy a slice of these 3 stocks: Genel Energy PLC (LON: GENL), Monitise Plc (LON: MONI) and LGO Energy PLC (LON: LGO)?

| 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.

Genel Energy

Shares in Genel Energy (LSE: GENL) have been hit hard in recent days as the Iraq-focused exploration company reported a loss in its full-year results for 2014. In fact, despite production and revenue gains, impairments and depreciation costs caused its bottom line to move to a loss of $312m. That’s disappointing, since Genel Energy had managed to report back-to-back years of profit prior to this and, looking ahead, its capital expenditure budget has been cut by 70% as CEO Tony Hayward is focused on the financial standing of the business.

That seems to be a prudent move, since Genel Energy needs to plan for a period of depressed oil prices. And, while investor sentiment may be somewhat weak at the moment, it could rise over the next couple of years because Genel Energy’s forecasts are very upbeat. For example, it trades on a price to earnings growth (PEG) ratio of just 0.3. This indicates that growth is on offer at a very reasonable price and, when combined with Genel Energy’s focus on its finances, could see it perform well in the long run.

Monitise

Monitise (LSE: MONI) is an incredibly difficult stock to understand. On the one hand, it has exposure to an extremely fast-growing part of the banking world: mobile payments, and has established relationships with major blue-chip companies such as IBM, Visa and MasterCard. However, on the other hand, it seems to be no closer to generating a profit and its future strategy appears to be somewhat lacking.

Due to this, investor sentiment has steadily weakened so that Monitise now trades at just 25% of its 2014 high of 80p per share. Looking ahead, it is difficult to see how the company can provide investors with much cheer over the next couple of years, with Monitise not expected to make a pretax profit in either of the next two years, it being open to asset sales, as well as cash burn that could lead to further capital raisings being necessary.

As such, it seems best to wait for positive news flow rather than buy ahead of it, since Monitise could continue to disappoint during the rest of the year.

LGO Energy

Although LGO Energy (LSE: LGO) remains a relatively high-risk company, it continues to have a sound strategy that could see its share price continue the run that has seen it treble in the last year. In fact, the company’s recent capital raising shows that investor sentiment remains buoyant and, over the medium to long term, it could become a highly profitable entity.

Certainly, its future progress will not continue unchecked and this means that investors should be prepared for considerable volatility. However, with its Goudron field in Trinidad now surpassing its target of 2,000 bopd and the company having the financial firepower to develop it further, it could prove to be a rewarding long-term investment. Certainly, a continued low oil price will not be of great assistance to its future performance but, even so, it could be a strong performer relative to its small-cap peers.

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 owns shares of Monitise. 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

Investing Articles

Warren Buffett owns this FTSE 100 stock. But should I?

Warren Buffett rarely invests in FTSE 100 shares but he does have a position in Diageo. Is it time for…

Read more »

Pink 3D image of the numbers '2025' growing in size
Investing Articles

After returning 101% in 2024 is this FTSE bank the best share to buy for 2025?

FTSE 100 bank NatWest Group turned out to be the best share to buy at the start of this year.…

Read more »

Investing Articles

Could Helium One be a millionaire-maker penny stock?

Shares of Helium One Global (LON:HE1) have soared 272% so far this year. Should I buy this penny stock while…

Read more »

Investing Articles

Are these 2 unsung FTSE blue-chips the passive income stocks I never knew I wanted?

Harvey Jones says that the FTSE 100 contains fantastic passive income stocks with deceptively modest yields. Here are two he's…

Read more »

A mixed ethnicity couple shopping for food in a supermarket
Investing Articles

Shhhh… These FTSE 250 stocks have quietly more than doubled in 2024

Forget those US tech titans. Our writer takes a closer look at two supposedly 'boring' FTSE 250 stocks that have…

Read more »

Investing Articles

As the Diageo share price flies on a double upgrade is this my last chance to buy it on the cheap?

The Diageo share price has inflicted plenty of pain on Harvey Jones in 2024, but suddenly it's serving up a…

Read more »

Investing Articles

7%+ yields! 3 choices to consider for a Stocks and Shares ISA

Christopher Ruane highlights a trio of FTSE companies each yielding over 7% he thinks investors should consider for a Stocks…

Read more »

Passive income text with pin graph chart on business table
Dividend Shares

How investors might try to turn £10,000 into a chunky passive income

Our writer Ken Hall looks at how the magic of compounding returns might help investors to create a handy second…

Read more »