Should you snap up these two big fallers today?

We’ve got some big movers today, and share price falls can lead to nice bargains. Are these two worth snapping up?

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Share price falls — if you own the shares they’re a bummer, but if you’re looking to buy they can brighten up your day. Here are two big fallers today that you might want to consider.

Drugs-related incident

It’s only a little more than a month since I was writing enthusiastically about Indivior (LSE: INDV), a pharmaceuticals company developing drugs for treating opioid addiction. Results from its latest phase 3 clinical trials were looking good. And since 3 May, the share price had soared by 120%.

Then today we see the shares plunging by 14%, to 281p, after the news broke that civil complaints have been filed by 35 US states and by the District of Columbia, alleging that the firm has violated state and federal antitrust and consumer protection laws.

It appears the complaint stems from alleged anti-competitive practices over the firm’s Suboxone heroin addiction treatment, with Indivior alleged to have urged users to switch to a different form of the drug after it lost its exclusive rights to sell the tablet version. Indivior, in response, says it “intends to continue to vigorously defend its position.

What does that mean for investors? We have a couple of years of falling earnings forecast, lifting the P/E to around 16.5 for 2017 before today’s share price drop. We’d be looking at a P/E of a bit over 14 now if forecasts aren’t revised, though they probably will be. I thought that was good value considering the potential in Indivior’s chosen market, but the latest news throws that all up in the air.

The thing is, no matter what the outcome, we’re surely in for a lengthy period of uncertainty that will keep a lot of investors away. Perhaps a bargain for the brave gambler, but I’d hold off for now.

Sell-off slump

Precious metals miner Polymetal (LSE: POLY) also had a bad day, with its shares down 8% to 975p in morning trading. But this time there’s no potential legal disaster looming, just a couple of its private investors wanting to take some profits from their holdings and announcing the sale of 6% of the company.

Polymetal’s shares have had a great run this year, more than doubling since a low on 21 January to Thursday’s close of 1,059p — and even after today’s drop, shareholders are still sitting on an 86% profit. Has the dip given us a buying opportunity?

Polymetal extracts gold for an all-in cost of $754 per ounce, according to August’s first-half figures, compared to the $1,337 market price today. That makes the miner one of the leanest in terms of costs, and potentially one of the most defensive in the event of a gold price fall.

With strong earnings growth on the cards, we’re now looking at a forward P/E multiple of 12 based on this year’s forecasts, dropping to 9.7 for 2017, with PEG growth indicators of 0.1 and 0.4 respectively (which are very attractive). Dividends should yield 3-4%.

On these fundamentals, then, the shares look attractively valued. But even with Polymetal’s high margins, any gold price slide would be sure to hurt the share price — and I’d say a future bearish spell for gold is almost certain, as the price is currently buoyed by weak economic sentiment. But if you disagree and want to buy gold shares, Polymetal could be one of the best.

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.

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.

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