2 bargain stocks you can’t afford to ignore

Royston Wild runs the rule over two white-hot value stocks.

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I reckon Informa’s (LSE: INF) pacy expansion drive and broad span of operations puts it in an outstanding position to create blistering earnings growth in the years ahead.

This week the publishing and events powerhouse announced that revenues rose 11% during 2016, to £1.35bn, with sales rising 1.6% on an organic basis. As a result, adjusted operating profit advanced 13.8% year-on-year, to £416.1m.

Informa’s latest results pay testament to its three-year Growth Investment Plan which is due to complete this year, and result in the rollout of more than 30 products through to the end of next year.

And Informa’s long-running expansion into the US also offers plenty of further upside, of course, particularly after the potentially game-changing acquisition of North American rival Penton during the autumn. Meanwhile, the company’s successful portfolio improvement programme looks set to continue with the possible divestment of its troubled domestic conference businesses at its Knowledge & Networking arm.

Square Mile analysts expect Informa to follow a predicted 16% earnings rise in 2016 with further advances of 12% for this year and 7% for 2018. And these forward numbers produce P/E ratios of 13.6 times and 12.7 times respectively, far below the prospective average of 15 times for its FTSE 100 compatriots.

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TV and film star Entertainment One (LSE: ETO) is also a brilliant growth bet for cash-savvy investors, in my opinion.

In a cheery update Entertainment One announced recently that “reported revenues in the full year have shown significant growth, having almost doubled against the previous year, with underlying EBITDA anticipated to be materially ahead of the previous year.

Entertainment One noted that its Television division continues to perform strongly and sales are expected to have doubled during the year to March 2017.

And looking elsewhere, Peppa Pig continues to bring home the bacon for the Entertainment One’s Family division, with merchandise sales exploding in the US thanks to a broad retail rollout before Christmas (the firm puts retail revenues Stateside at $200m in the 2016 calendar year). And Entertainment One’s PJ Masks show has also exceeded sales predictions, and which are likely to pick up as licensing across the globe steps up during the next 12 months.

Entertainment One expects sales to have risen 25% last year at Family, and predicts that box office revenues at its Film division to have advanced by a similar percentage thanks to monster releases like La La Land and Arrival.

The firm is clearly picking up a head of steam, and the City consequently expects it to recover from an anticipated 1% earnings slide in fiscal 2017 with rises of 18% and 8% in 2018 and 2019 respectively. And these figures result in P/E ratios of just 10.6 times and 9.9 times.

I believe both Entertainment One and Informa are great buys at current prices considering their exceptional earnings potential.

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.

Royston Wild has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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