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Don’t invest in Stagecoach Group plc, Hargreaves Services plc and Mortgage Advice Bureau (Holdings) plc until you’ve read this

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Shares in Hargreaves Services (LSE: HSP) have risen by around 12% today after it released details of a restructuring. The UK’s leading supplier of solid fuels and bulk material logistics will focus on its core operations, develop and realise the value of its property and energy projects, as well as realise its legacy assets into cash.

Hargreaves Services’ core operations will now comprise coal distribution, specialist earthworks and infrastructure services, industrial services and transport and logistics services. And with Hargreaves Services controlling around 18,500 acres of property across the UK, it plans to create significant medium-term value and cash generation from the development of projects within its property portfolio.

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Clearly, Hargreaves Services has experienced a difficult period in recent years, but today’s announcement seems to have been well-received by the market and could indicate the start of an improved period for the business. However, it may be prudent to wait for evidence of improving financial performance before buying a slice of the business – especially since Hargreaves Services trading remains mixed.

Sticking to the timetable

Also reporting today was transport company Stagecoach (LSE: SGC), with its trading statement showing that it’s on target to meet full-year expectations. Although like-for-like (LFL) sales growth of 4.6% was recorded in the company’s Virgin Rail Group alongside LFL growth of 2.5% for Stagecoach’s UK rail segment, it has warned of a challenging future for the division.

That’s because the overall industry rate of revenue growth has slowed in recent months and looking ahead, Stagecoach sees further deterioration over the medium term. It expects weakening consumer confidence, terrorism concerns, sustained lower fuel prices, the related effects of car and air competition as well as slower UK GDP growth to have a negative impact on the industry.

Clearly, this paints a downbeat picture of the company’s outlook. However, Stagecoach continues to offer a fairly wide margin of safety so its risk/reward ratio remains appealing. For example, it trades on a price-to-earnings (P/E) ratio of just 9.2 and with it yielding 4.7%, remains an enticing income and value play for the long term.

Stake sale

Meanwhile, shares in Mortgage Advice Bureau (LSE: MAB1) have slumped by 11% today after it announced that a group of major shareholders is planning to sell a 15% stake in the financial advisory business. With this including a number of senior directors including the Chief Executive, the market has reacted negatively to the news.

With Mortgage Advice Bureau forecast to increase its bottom line by 12% in the current year and by a further 19% next year, investor sentiment could improve over the medium term. And with Mortgage Advice Bureau having a price-to-earnings-growth (PEG) ratio of just 0.9, it seems to offer good value for money. However, with the outlook for the UK housing market being relatively uncertain, it may be prudent to look elsewhere at the present time – especially while investor sentiment in the company is apparently coming under pressure.

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Peter Stephens has no position in any shares mentioned. The Motley Fool UK has recommended Stagecoach. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

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