Today I am looking at four of the FTSE’s recent headline makers.
A seismic sell-off
Shares in copper miner Xtract Resources (LSE: XTR) have taken an absolute pasting in Tuesday trading following the publication of a worrisome half yearly report, and the business was last dealing 20% lower on the day. The company announced that recent earthquake activity rendered the main access haulage at its Chepica asset unsafe. Consequently the main mining area will be inaccessible for three months, as Xtract develops a new haulage system that will access the ore body from a different position.
The mining industry is naturally fraught with dangers, particularly those that operate in the quake hotspot of Chile, while one-off problems and grade disappointments can also lead to hefty share price movement, as Xtract has found to its peril. The business has performed well in recent times, and narrowed its pre-tax loss to £800,000 during January-June from £1m a year earlier. But with a tanking copper price also adding to Xtract’s problems, I believe the share is a risk too far at present.
Source a fortune
The market greeted latest results from outsourcing colossus Mitie Group (LSE: MTO) with greater fanfare, however, and the stock was recently 3% higher in Tuesday’s session. The Bristol business advised that it had enjoyed “a good start to the year with good organic revenue growth driven by new and recently expanded contracts,” and said that it had inked a flurry of fresh contracts with FTSE glitterati such as Rolls-Royce, Vodafone and Sky.
With the company also securing a swathe of contracts from new clients, Mitie has now secured 94% of budgeted revenues for the year ending March 2015. And the City seems convinced this positive momentum is set to continue — growth of 1% for the current period is expected to accelerate to 7% for 2017. Consequently Mitie deals on ultra-attractive P/E multiples of just 11.3 times and 10.6 times for 2016 and 2017 respectively.
Tux trade on the charge
Tailoring experts Moss Bros (LSE: MOSB) also cheered investors with its latest release, driving the stock 6% higher around midday. The ‘suiter-and’booter’ announced that pre-tax profits had surged 44% during February-July, to £2.8m, driven by a like-for-like sales improvement of 9.7%. The retailer has invested heavily in its online presence in recent times, a factor that helped to drive internet trade 59% higher in the period.
With its extensive store modernisation programme also driving demand for its fashion lines, Moss Bros is expected to clock up earnings expansion of 7% for the 12 months to January 2016, resulting in a slightly-elevated P/E of 20.7 times. But this figure drops to just 17.7 times for 2017 amid forecasts of a 17% bottom-line bounce. I believe this is a great price for a Moss Bros and its terrific growth prospects.
Fly high with FTSE carrier
Budget airline Wizz Air Holdings (LSE: WIZZ) has also enjoyed a flip higher thanks to solid summer business, and its share price was recently 2.9% higher from Monday’s close. The flyer — which specialises on travel across Central and Eastern Europe destinations — commented that “the strong [first half] financial performance, combined with robust bookings for the third quarter, are encouraging,” and consequently upgraded its net profit forecasts for the full-year.
The bottom line is now expected to register at between €190m and €200m for the year ending January 2016, up from July’s prediction of between €175m and €185m. With Wizz Air steadily expanding its network, not to mention reaping the benefits of subdued fuel costs, the City expects earnings to keep on surging. And subsequent P/E multiples of 17.1 times for 2016 and 15.2 times for 2017 make Wizz Air a brilliantly-priced growth pick, in my opinion.
