Should You Buy Vedanta Resources plc, Allied Minds PLC & Internetq Plc On Tuesday?

Royston Wild takes a look at FTSE fallers Vedanta Resources plc (LON: VED), Allied Minds PLC (LON: ALM) and Internetq Plc (LON: INTQ).

| 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.

Today I am looking at the investment case for three London-listed stock losers.

Digger declines again

Energy and metals giant Vedanta Resources (LSE: VED) suffered another steep fall in edgy Tuesday trading, the business last seen dealing 9% lower from the prior close, as the commodities sector washed out once again.

Although Vedanta can take heart from zinc prices rising to multi-month highs around $1,770 per tonne today — the galvanising metal is by some distance the firm’s largest market — worsening fundamental balances across other markets like copper, aluminium, iron ore and oil threatens to keep earnings on the back foot.

Vedanta saw earnings slump 51%, to $493.6m, between October and December, thanks to the enduring pressure across commodity markets. The City expects the London firm to clock up a second successive loss in the year to March 2016, and I do not foresee a recovery any time soon, given stuttering resources demand and rising production levels across many sectors.

A troubled tech play

Science and tech developers Allied Minds (LSE: ALM) also took a hefty whack in Tuesday’s session following its latest trading statement and was trading 5% lower on the day at the time of writing.

Allied Minds advised that revenues had collapsed 58% during 2015, falling to $3.2m, a result that was put down to sales weakness at its RF Biocidics (RF) subsidiary. The company noted that the unit “now requires certification for each individual installation and is subsequently delaying revenue.”

However, Allied Minds was quick to point out the progress it had made on the R&D side in 2015, having invested $102.8m across its subsidiaries. The business also added 90 research institutions to its partner network last year, taking the total to 160, while new collaborations with Bristol-Myers Squibb, Intel, AMD and Google have also been greeted with much fanfare.

The Neil Woodford-backed firm is not expected to swing into the black any time soon, however, and the number crunchers have pencilled in a fourth successive annual loss for 2016. And given the early stage of much of Allied Minds’ technologies, I believe those expecting a bottom-line uptick any time soon may end up disappointed.

Mobile specialists move down

Mobile marketing play InternetQ (LSE: INTQ) completed the set in Tuesday business following its own trading statement — the business was last seen dealing 2.8% lower from the previous close.

At face value InternetQ’s update couldn’t be considered half bad. Revenues advanced by around 15% during 2015, to some €150m, the company advised, with sales at its B2B mobile marketing arm contributing almost three-quarters of this amount.

Investor appetite for InternetQ has surged in recent days, following a takeover attempt by a consortium led by chief executive Panagiotis Dimitropoulos. Discussions are still at an early stage and the group is yet to make a formal offer.

InternetQ’s shares took a whack last year after the self-proclaimed ‘Sheriff Of AIM’ Tom Winnifrith launched an attack on the firm’s stated profit figures, debt levels, operating costs and cash generation. But with the City forecasting a 31% earnings leap in 2016 — resulting in a mega-low P/E rating of 1.7 times — many investors may consider the tech play worth a look at current prices.

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.

Royston Wild 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

Illustration of flames over a black background
Investing Articles

2 red-hot UK growth stocks to consider buying in April

These two growth stocks are performing well, but can they continue to deliver for investors through 2024 and beyond?

Read more »

Charticle

Is JD Sports Fashion one of the FTSE 100’s best value stocks? Here’s what the charts say!

The JD Sports Fashion share price remains a wild ride during the first quarter. Could it be one of the…

Read more »

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 »