The Motley Fool

Three top picks on Thursday’s news?

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.

Are there any rich pickings among the post-referendum fallen? Here are three companies releasing news today, whose share prices are in the dumps — they just might be bargains!

Easy bargain?

Airlines suffered badly from the Brexit fallout, with easyJet (LSE: EZJ) shares down 40% to 1,010p — even if access to Europe’s open skies is retained by EU negotiation, the fall in the pound has hiked fuel costs in sterling (although revenue in euros will be worth more now).

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!

Last month’s disappointing third-quarter update didn’t help, with total revenue per seat dropping 8.3% (at constant currency) even though the number of passengers carried rose by 5.8%. That wasn’t entirely due to the Brexit vote, mind, and the firm put some of the blame on a number of other causes including terrorism, an air traffic controllers’ strike, and runway closures.

Today we’ve had passenger statistics for July, and they’re looking good, Passenger numbers rose by 6.7%, with easyJet boasting a 95.8% load factor (up from 94.3%) which some other airlines can only dream of. Over a rolling 12 months, 6.8% more passengers were carried at a load factor of 91.7%.

What about valuation? Even with downgraded forecasts, the shares are on a forward P/E of only nine and there’s a 5.3% dividend yield expected. That looks oversold to me.

Another cheap airline?

Meanwhile, International Consolidated Airlines (LSE: IAG) has released its July traffic statistics too — the owner of British Airways and Spain’s Iberia reports differently to easyJet, but its figures look impressive.

The company measures revenue passenger kilometres and reported a 15.7% rise against July 2015 (5.6% on a pro-forma basis), with capacity (measured in available seat kilometres) up by 14.3% (4.6% pro-forma). Pro-forma premium traffic was up 6.1%.

The share price is up a modest 1% on the day to 392p, though it’s still down 26% since the Brexit vote after a bit of a recovery since the immediate aftermath. Looking forward, forecasts value the shares at only five times full-year earnings, with a dividend yield of 5% on the cards. That looks too cheap to me.

Recovery candidate?

Marketing services firm Communisis (LSE: CMS) has seen its shares slide by 39% since last October up until yesterday’s close, but a positive set of first-half results today provided a 7.7% boost to take the shares to 37p — chief executive Andy Blundell said the firm has “grown profitability, sustained strong cash generation, further reduced net debt and increased the dividend“.

Revenue remained pretty much unchanged, but adjusted pre-tax profit rose by 19% to £6.5m to give adjusted earnings per share a 19% boost to 2.42p, and the interim dividend was lifted 10% to 0.81p per share. Free cash flow of £6.1m helped to get the company’s net debt down by £4.5m to £34.9m, for a reduction of 10%. So is it time to buy?

Well, full-year forecasts for a 21% EPS rise put the shares on a P/E of just under six — and there’s a whopping 6.5% dividend yield on the cards. And based on 2017 forecasts, we’d be looking at the same P/E and a dividend yielding 6.8%. The debt figure doesn’t look too bad for a £78m company, though it’s in a low-margin business and I’d like to see it reduced further — but on first inspection, Communisis looks good value to me.

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

Alan Oscroft 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.