Are Vodafone Group Plc, Moneysupermarket.Com Group PLC And IG Group Holdings plc Set To Post Stellar Returns?

Should you pile into these 3 stocks? Vodafone Group Plc (LON: VOD), Moneysupermarket.Com Group PLC (LON: MONY) and IG Group Holdings plc (LON: IGG).

| 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.

Shares in online price comparison website Moneysupermarket.Com (LSE: MONY) have tumbled by as much as 9% today. That’s despite it releasing an update that stated adjusted operating profit for the full year is now expected to be ahead of expectations. A figure of £99m versus guidance of £98.3m is due to be reported for 2015.

A possible reason for the company’s share price decline is a fall in revenue from its insurance division. Moneysupermarket.Com experienced stronger-than-anticipated competitor marketing activity during the year and decided to maintain its margins rather than cut prices. As such, fourth quarter revenue increased by 5%, while for the full year it was much higher at 14%. However, the company is introducing initiatives to bring momentum back to its insurance business during the course of 2016.

Looking ahead, Moneysupermarket.Com is expected to record a rise in earnings of just 7% in 2016. When this is combined with a price-to-earnings (P/E) ratio of 21.5, plus the potential for further challenges in its insurance division, it makes the stock a relatively unappealing buy at the present time.

Benefitting from volatility

Meanwhile, spread betting provider IG Group (LSE: IGG) today announced the appointment of an interim Chief Financial Officer (CFO). Due to the rise in market volatility in recent months, it’s likely to be a beneficiary since trading activity for spread betting providers tends to increase during the more challenging periods for the stock market. Evidence of this can be seen in IG’s first quarter update that showed client activity spiked in August at a time when the FTSE 100 was particularly volatile.

Looking ahead, IG is expected to increase its bottom line by 10% in the current year and with it trading on a P/E ratio of 16.3, it appears to offer good value for money. That’s especially the case since stock markets are set to remain uncertain and highly volatile over the coming months.

Take a look

Another stock that seems to be worth buying is Vodafone (LSE: VOD). Its shares have outperformed the FTSE 100 by 13% in the last three months. And with the European economy set to deliver improved growth numbers due to the impact of quantitative easing, further gains could be on the cards.

In addition, Vodafone’s diversification into broadband and pay-TV is also likely to be beneficial to its sales and profit outlook. That’s because it should provide considerable cross-selling opportunities, while also reducing Vodafone’s reliance on telecoms sales for its revenue. And with Vodafone having a strong balance sheet, further acquisition activity could be a feature of 2016 as it seeks to take advantage of asset prices that may still be discounted to their intrinsic value.

With Vodafone having a yield of 5.3% and being forecast to increase its earnings by 19% in the next financial year, now could be a logical time to buy it.

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 owns shares of Vodafone. The Motley Fool UK has recommended Moneysupermarket.com. 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

Could the JD Sports Fashion share price double in the next five years?

The JD Sports Fashion share price has nearly halved in the past five years. Our writer thinks a proven business…

Read more »

Bus waiting in front of the London Stock Exchange on a sunny day.
Investing Articles

If interest rate cuts are coming, I think these UK growth stocks could soar!

Falling interest could be great news for UK growth stocks, especially those that have been under the cosh recently. Paul…

Read more »

Investing Articles

Are these the best stocks to buy on the FTSE right now?

With the UK stock market on the way to hitting new highs, this Fool is considering which are the best…

Read more »

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 »