The Motley Fool

Can last week’s losers Standard Life plc, DFS Furniture plc and Gulf Marine Services plc bounce back?

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.

DFS sofa
Image: DFS: Fair use

Asset manager Standard Life’s (LSE: SL) 10% share price slump from last Monday-Friday isn’t difficult to understand after the shockwaves hitting its UK property fund became apparent.

Standard Life — like seven other major asset management providers including Aviva and Prudential — advised that it had halted redemptions on its £2.9bn fund. The sector is battening down the hatches in order to avoid an asset fire sale as investors head for the door.

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic… and with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. And if you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio.

Click here to claim your free copy now!

The scale of market panic makes this a potentially-perilous time for Standard Life and its peers, a situation that could lead to massive outflows across the business.

At face value these risks may arguably baked-in to Standard Life’s share value, the firm dealing on a forward P/E rating of just 10.3 times. But I reckon the company’s uncertain outlook for the near term and beyond still makes it a gamble too far at the present time.

Sales set to slouch

An environment of sinking consumer confidence following the EU referendum has sent DFS Furniture (LSE: DFS) sliding in recent weeks.

Indeed, the sofa seller has seen its stock price erode 38% since the ballot boxes were closed, including a 12% dip between last Monday and Friday. And I believe further weakness can be expected in the weeks and months ahead as Britons put off spending on ‘big ticket’ items.

Research specialists GfK and YouGov have both released disappointing gauges in recent days, painting a picture of restrained shopper spend as Britons hunker down for a potential recession. As such, it’s easy to see sales of DFS Furniture’s goods declining sharply.

Like Standard Life, DFS Furniture deals on very cheap earnings multiples, the firm changing hands on P/E ratios of 8.1 times and 7.3 times for the years ending July 2017 and 2018 respectively.

But I reckon the strong possibility of significant earnings downgrades for this year and further out still makes the furniture flogger an unattractive pick for the moment.

Contracts corked

Oilfield services provider Gulf Marine Services (LSE: GMS) has also seen its share price decline during the past week, the firm suffering a 27% decline following a disappointing trading update.

Gulf Marine Services announced that two contracts had been cancelled by Middle Eastern customers, an environment of low oil prices prompting its clients to keep the lid on costs. As a result, Gulf Marine Services now expects EBITDA for 2016 to ring in at between $100m and $110m, down from $138.5m in the prior 12-month period.

And it’s difficult to see how oil prices — and with it Gulf Marine Service’s earnings performance — can significantly recover from current levels, as US producers get back to work again and a desperately-required output cut from OPEC remains as elusive as ever.

Sure, some would say that Gulf Marine Services is worth a punt at current prices, the firm dealing on a meagre P/E rating of 3.4 times. But its fragile financial position adds a further layer of risk for stock pickers. I reckon investors should steer well clear at present.

Is this little-known company the next ‘Monster’ IPO?

Right now, this ‘screaming BUY’ stock is trading at a steep discount from its IPO price, but it looks like the sky is the limit in the years ahead.

Because this North American company is the clear leader in its field which is estimated to be worth US$261 BILLION by 2025.

The Motley Fool UK analyst team has just published a comprehensive report that shows you exactly why we believe it has so much upside potential.

But I warn you, you’ll need to act quickly, given how fast this ‘Monster IPO’ is already moving.

Click here to see how you can get a copy of this report for yourself today

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.

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply click below to discover how you can take advantage of this.