3 to buy on Friday’s news?

Here are three of today’s risers that could well be profitable investments.

| 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.

We have a relatively quiet day for company news today, but there’s still some worth watching. Here are three companies making waves on Friday.

Food technology

Are you ever on the lookout for a tempting growth opportunity? I see one such possibility in Benchmark Holdings (LSE: BMK), the biotechnologist developing hi-tech products for the food production industry. It has a new sea bass vaccine on trial, as an example of what it does.

Inflation Is Coming

Inflation is out of control, and people are running scared. But right now there’s one thing we believe Investors should avoid doing at all costs… and that’s doing nothing. That’s why we’ve put together a special report that uncovers 3 of our top UK and US share ideas to try and best hedge against inflation… and better still, we’re giving it away completely FREE today!

Click here to claim your copy now!

The company has been recording losses, but analysts are forecasting a swing into profit this year with a substantial improvement in 2017. Today the shares are up 4.3% to 61p on the upbeat news that the company is set for a new placing of 47m shares — at 65p per share, a premium to the market price.

The £30m raised will, in the words of chief executive Malcolm Pye, “allow us to continue to execute our strategy of making value-enhancing selective acquisitions, and allow Benchmark to invest in some important strategic joint ventures to deliver significant synergies and sales growth.

A P/E of 23 and a PEG of 0.3 based on 2017 forecasts look tempting to me.

Mining boost

Rio Tinto (LSE: RIO) shares are up 58% since their 2016 low on 20 January, including a 3% boost today to 2,490p after the miner told us it has completed the sale of its Mount Pleasant thermal coal assets in Australia for $220.7m plus royalties — taking the value of the firm’s divestments since January 2013 to $4.7bn.

The news comes on the back of mixed first-half results on 3 August, in a period in which new chief executive Jean-Sébastien Jacques described the market as “uncertain and volatile“. The shares actually dipped a little on the day of the results, but that doesn’t really take the shine off the 19% gain we’ve seen since the Brexit vote, so is Rio Tinto a post-referendum safe bet?

There’s still a 24% fall in EPS forecast for the full year, putting the shares on a P/E of 17, and there’s a not-too-exciting dividend yield of 3.6% on the cards. But the shares are clearly valued for their attractive long-term safety and their income potential, and I find that hard to argue with.

Flying oily

One of today’s biggest risers is Cairn Energy (LSE: CNE), whose shares are up 7.4% to 195p, on the day that UBS raised its stance on the share from neutral to buy. Cairn shares got off to a great start in 2016, climbing 82% from January’s low point to late April, but since then we’ve seen a 16% fall. Does today’s uprating suggest good things to come in the long term?

It’s hard to place any meaningful valuation on Cairn shares right now, as a couple more years of losses mean there’s no P/E or dividends to evaluate. But Cairn does have some nice prospects.

The firm should have new production from its Catcher and Kraken prospects in the North Sea coming online next year, and though production costs in the North Sea are relatively high, oil prices could well be significantly higher by then. And production costs at Cairn’s African projects should be attractively low, with potential discoveries there quite promising.

I personally dislike not having bottom line profits to count, but Cairn must be a serious option for oil investors.

More on Investing Articles

Social media and digital online concept, woman using smartphone
Investing Articles

Will Lloyds shares recover in 2022?

Lloyds shares have struggled this year and the looming recession won't help. But I'd still buy them today.

Read more »

Two hands holding champagne glasses toasting each other with Paris in the background
Investing Articles

Can the stock market make me rich even now?

Here are three ways I'm coping with the stock market's recent bout of weakness and aiming to build wealth in…

Read more »

Cogs turning against each other
Investing Articles

3 top investment trusts to buy right now

Investment trusts offer a wide range of options for investors. And in troubled times, they provide some safety through diversification…

Read more »

pensive bearded business man sitting on chair looking out of the window
Investing Articles

Why hasn’t the FTSE 100 crashed in 2022?

The catastrophic events of 2022 have left investors around the globe fearing the worst for stock markets. And some have…

Read more »

Trader on video call from his home office
Investing Articles

2 inflation-resistant FTSE 100 stocks to buy today

Soaring inflation could dent my returns if I don't take care. Here are two top inflation-resistant FTSE 100 stocks I'd…

Read more »

Tabletop model of a bear sat on desk in front of monitors showing stock charts
Investing Articles

Why a bear market is an investor’s best friend

A bear market can certainly be scary. But any investor tempted to sell might benefit by looking at Warren Buffett's…

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

The Rolls-Royce share price could be stuck below £1 for a while. Should I buy?

The Rolls-Royce share price has been trading at penny stock levels since April. Could the stock be a bargain at…

Read more »

Young brown woman delighted with what she sees on her screen
Investing Articles

I’m aiming to make £45,000 in passive income with UK shares and never work again!

Investing regularly in UK shares can generate a substantial passive income over the long run. Zaven Boyrazian demonstrates how.

Read more »