Should you buy Wincanton plc (+9%), Future plc (+8%) and Xcite Energy Limited (+10%) after today’s huge share price moves?

Are these 3 risers ripe for investment? Wincanton plc (LON:WIN), Future plc (LON: FUTR) and Xcite Energy Limited (LON: XEL)

| 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.

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.

Increasingly confident

Shares in Wincanton (LSE: WIN) have risen by as much as 9% today, despite no significant news flow being released by the company. The supply-chain solutions specialist is most likely up by such a large extent due to a general improvement in investor confidence, now that a vote to remain in the EU seems more likely after recent polls.

A vote to ‘remain’ would probably be good news in the short run for Wincanton, due to its UK-focus, and the restoration of some ‘certainty’ that a vote for the status quo would bring — certainly compared to the months or even years of uncertainty that a ‘leave’ vote would produce. Encouragingly, the company seems to be making strong progress and its recent results show that the challenges which it has faced in recent years may be easing somewhat. Evidence of this can be seen in Wincanton’s decision to reintroduce dividends, which indicates that management is becoming increasingly confident in the long term prospects for the business.

With Wincanton forecast to post a rise in its bottom line of 8% next year and its shares trading on a price-to-earnings (P/E) ratio of just 9, it seems to be an excellent long term buy.

A potential boost

Also rising today are shares in media group  Future (LSE: FUTR), which announced the acquisition of Miura, the parent company of Imagine Publishing. The total consideration is £14.2m and will be paid for via the issue of 179.5m new shares in Future. With the deal representing a logical step for Future in terms of increasing its scale and improving operational efficiencies, it seems to be a good move for the company’s long term profitability.

With Future forecast to increase its bottom line by 60% in the current year and by a further 163% next year, it seems to be on the cusp of drastically improved financial performance. This has the potential to boost investor sentiment in the stock, and Future’s share price fall of 21% since the start of the year could easily be reversed. That’s especially the case since it trades on a price-to-earnings growth (PEG) ratio of just 0.1, which indicates that it offers staggering growth prospects at a very reasonable price.

Struggling with debt

Meanwhile, shares in Xcite Energy (LSE: XEL) have soared by as much as 10% today, even in the absence of any news from the North Sea oil explorer. Clearly, the current period is a highly uncertain one for Xcite, with there seemingly being a good chance that a portion of its debt will be swapped for equity in the near term. That’s because it is struggling to repay its debt and such a move would squeeze the returns for existing shareholders.

Certainly, Xcite’s Bentley field has considerable long term profit potential, but with the oil price having fallen dramatically, Xcite has been unable to find a buyer or partner for the prospect. And with its finances in such a difficult position, it seems wise for investors seeking a small-cap oil exploration business to look elsewhere.

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 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

Investing Articles

Despite rising 152% in a year, is Rolls-Royce’s share price still a bargain?

While Rolls-Royce’s share price has shot up recently, it still looks very undervalued against its peers, and the business looks…

Read more »

Investing Articles

Could Nvidia stock be a bargain in plain sight?

Nvidia stock has surged 252% over the past 12 months, but that doesn't mean it's expensive. In fact, it may…

Read more »

Investing Articles

Here’s why I think the Vodafone share price should be 110% higher

Reflecting on speculation, our writer believes there’s a case to be made for the Vodafone share price being more than…

Read more »

A pastel colored growing graph with rising rocket.
Investing Articles

Is this dividend star also the best bargain in the FTSE 100?

This FTSE 100 stock pays a whopping 8%+ yield, looks very undervalued against its peers, and is set for stellar…

Read more »

Investing Articles

2 FTSE 100 stocks. One sublime, the other ridiculous

Our writer doesn’t understand the appeal of Ocado. But looking at the grocer’s latest results makes him see the attraction…

Read more »

Portrait of elderly man wearing white denim shirt and glasses looking up with hand on chin. Thoughtful senior entrepreneur, studio shot against grey background.
Investing Articles

Down 18% in a year, what’s next for the Greatland Gold (GGP) share price?

The Greatland Gold share price has disappointed over the past 12 months. Our writer asks whether the company’s latest update…

Read more »

Investor looking at stock graph on a tablet with their finger hovering over the Buy button
Investing Articles

With 30% annual returns for a decade, I’m buying this for my Stocks & Shares ISA

Oliver Rodzianko has been looking for a new investment for his Stocks and Shares ISA. Here's one he's decided is…

Read more »

Investing Articles

These were the FTSE 100’s dogs and stars in February

The FTSE 100 limped along last month, but some Footsie shares soared while others slumped. Here are February's winners and…

Read more »