Today I’m running the rule over three midweek newsmakers.
Road warrior
Broad risk-aversion has seen coaches colossus National Express (LSE: NEX) slip 1% on Wednesday despite the release of an upbeat trading update.
National Express advised that it “has made a strong start to the year, with total revenue up 11% in the period on a constant currency basis” in the year to 1 April. Underlying sales were up 4% during the period, the firm added, with revenues growing across all its divisions.
National Express managed to post underlying revenue growth of 4% at its UK Coach division, despite the impact of recent terror-related incidents in Belgium in March, with passenger numbers rising 6% in the period.
With National Express clearly making strong progress at home and abroad, the City expects earnings to rise 6% in 2016 alone, resulting in a very attractive P/E rating of 13.2 times.
And a chunky dividend yield of 3.7% for the year makes the bus-and-train operator an attractive investment destination, in my opinion.
Media star
Business information and media specialist Centaur Media (LSE: CAU) also furnished the market with a bright trading update in midweek business. However, this couldn’t stop the stock slumping to fresh two-and-a-half-year lows below 50p.
Centaur announced that revenues had risen 5% between January and April, prompting it to affirm its full-year guidance for 2016.
Centaur added that “paid-for content and exhibitions revenues continue to grow well, although we are currently experiencing some market pressure in advertising and sponsorship revenues.”
The City expects growth in its high-quality channels to deliver plump returns in the coming years, and Centaur is expected to follow flatlining earnings in 2016 with a 10% jump in 2017. Consequently the media play boasts ultra-low P/E ratings of 9.2 times and 8.6 times for these periods.
And dividend hunters should give dividend projections for Centaur serious attention — the firm boasts market-bashing yields of 6.2% and 6.7% for 2016 and 2017.
Credit concerns
Credit report provider Experian (LSE: EXPN) also saw its share price slip on Wednesday, the firm enduring a 2% fall following a patchy set of trading numbers.
Experian advised that revenues slipped 4% in the year to March 2016, to $4.5bn, reflecting the adverse impact of currency movements. At constant exchange rates the top line actually grew 5% in the period.
Profit before tax clocked in at just over $1bn during the period, up marginally year-on-year.
Experian also announced plans to buy back $400m worth of shares in the current fiscal year, drawing to a close the current $800m repurchase programme.
While the City expects earnings to grow 5% in 2017, this figure results in an elevated P/E rating of 19 times. And a 2.3% dividend yields for the current year lags the prospective FTSE 100 average of 3.5% by some margin.
Given the likelihood of further chronic currency headaches this year and beyond, I believe Experian is an unattractive stock selection at current prices.
