Should you shun these 3 stocks after today’s results?

Foxtons Group plc (LON: FOXT), IMI Group plc (LON: IMI) and Centaur Media plc (LON: CAU) could be buying opportunities after today’s patchy results says Harvey Jones.

| 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.

Sometimes poor results can trigger a tempting buying opportunity. The following three companies have disappointed, but could this be a good entry point?

What does Foxtons say?

Who shot Foxtons Group (LSE: FOXT)? Once again, it was Brexit that pulled the trigger as the EU referendum becomes the perfect blame-all for any business with a disappointing story to tell. The group’s half-year profits are certainly disappointing, down 42.2% to £10.5m due to a slowing property market with little hope of recovery this year. Revenue fell 3.1% to £68.8m.

5 Stocks For Trying To Build Wealth After 50

One notable billionaire made 99% of his current wealth after his 50th birthday. And here at The Motley Fool, we believe it is NEVER too late to start trying to build your fortune in the stock market. Our expert Motley Fool analyst team have shortlisted 5 companies that they believe could be a great fit for investors aged 50+ trying to build long-term, diversified portfolios.

Click here to claim your free copy now!

The London property market, where Foxtons is focused, had to slow at some point, and there were signs it was doing so well before Brexit. What the result may do is stretch out the pain that little bit further, although the 10% drop in Sterling may also attract foreign buyers. The second quarter was much weaker than the first and this was as much down to the 3% stamp duty surcharge introduced on 1 April as the Leave victory.

Foxtons remains a big player in the London sales and lettings market and is looking to expand to 100 branches, despite current uncertainties. The shares are down nearly 7% today leaving Foxtons trading at 10.08 times earnings and yielding 4.34%, which may tempt buyers who believe the capital can boom again.

Profits down, shares up

Engineering firm IMI (LSE: IMI) has seen its share price leap more than 3% in early trading, despite reporting a 19% drop in first-half pre-tax profits from £107m to £86m as revenue fell in challenging conditions. Net debt rose from £289m to £334m, partly due to an adverse currency impact of £70m.  

IMI expects more favourable currency impacts over the full year as it generates more than 90% of sales outside the UK and a weaker pound could boost revenues and operating profits. The business faces challenging conditions in a number of key sectors but chief executive Mark Selway claims he can drive growth through operational efficiency, enhancing processes and launching new products. Given the challenges, IMI looks pricey at 16.64 times earnings, despite the respectable 3.59% yield.

Less than bullish

Multi-platform business information and events group Centaur Media (LSE: CAU) has had a tough year, its share price falling 54% from 81p to 37p. It has seen its advertising and sponsorships revenues squeezed in recent months, yet recent updates show revenues rising at a fairly convincing pace, and this continues in today’s update.

Reported revenues grew by 8% to £39.9m in the six months to 30 June with underlying revenue growth of 4%. Premium content and live events revenues was up, more than offsetting a 6% drop in advertising revenues. Unfortunately, this was offset by a dip in adjusted operating profits to £5m, down from £6.1m in 2015, while adjusted operating margins of 12.5% were down from 16.6% in 2015. Lower advertising revenues, the cost of building premium content products and commercial team capability all hit reported operating profits, which slumped to £3.1m, down from £4.8m last year.

Centaur’s 170% cash conversion for the first four months of the year may convince some, as will its rock bottom valuation of 6.73 times earnings and sky-high 8.33% yield. Tempting, but risky.

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

Harvey Jones has no position in any shares mentioned. The Motley Fool UK has recommended IMI. 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

A Rolls-Royce employee works on an engine
Investing Articles

In penny stock territory, is the Rolls-Royce share price set to soar?

The Rolls-Royce share price has sunk recently, falling into penny stock territory. But with flying hours recovering, is it too…

Read more »

Hand of person putting wood cube block with word VALUE on wooden table
Investing Articles

Lloyds shares drop 20% in 4 months. Should I buy now?

Lloyds shares have lost a fifth of their value since peaking on 17 January this year. But after rebounding from…

Read more »

Warren Buffett at a Berkshire Hathaway AGM
Investing Articles

As the stock market recovery stalls, should I wait to buy?

Has the stock market recovery run out of steam? If so, what does that mean for our writer's portfolio? Here…

Read more »

Diagonal chain made of zeros and ones. Cryptocurrency and mining.
Investing Articles

At 55p, is the Argo Blockchain (LON:ARB) share price too cheap to miss?

With a low P/E ratio and strong financial results, could the Bitcoin miner be good value for money?

Read more »

macro shot of computer monitor with FTSE 100 stock market data in trading application
Investing Articles

Here are 2 recession-proof FTSE stocks!

In the face of current economic uncertainty and fears of a looming recession, this Fool identifies two recession-proof FTSE stocks.

Read more »

British Pennies on a Pound Note
Investing Articles

Here is 1 penny stock primed to benefit from the construction boom!

Jabran Khan delves deeper into a penny stock that he believes could benefit from the construction boom, and explains why…

Read more »

Various denominations of notes in a pile
Investing Articles

Here is 1 top passive income stock to buy and hold!

Jabran Khan wants to boost his passive income stream through dividends and has identified this insurance giant as a way…

Read more »

Cheerful young businesspeople with laptop working in office
Investing Articles

These are the 5 worst ways to invest in stocks

It's all too easy to lose money when you don't really know how to invest in stocks. Here are the…

Read more »