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2 value stocks you can’t afford to miss!

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I reckon investors could look to enjoy delicious winnings by putting their investment cash in gambling giant Playtech (LSE: PTEC).

The company saw revenues soar 12% last year to €708.6m thanks to a combination of strong organic growth and the positive impact of recent acquisitions.

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And the gambling play has plenty of balance sheet strength to keep M&A activity rolling along. The company made four shrewd acquisitions, including BGT and CFH, last year alone at a cost of €240m. It ended 2016 with gross cash of €545m in the hole.

Meanwhile, Playtech can also take great confidence that the revenues should keep streaming higher, as significant contract renewals with industry giants like Paddy Power Betfair and William Hill in 2016 locked nine of the company’s 10 major clients into long-term deals.

An ace investment

Now although investors have piled back into Playtech with gusto in recent weeks, I believe the online betting star still offers splendid value for money.

For 2017 it is anticipated to report a 28% earnings rise, resulting in a P/E ratio of 13.1 times, far below the benchmark of 15 times broadly considered great value. As well, a sub-1 PEG reading of 0.5 underlines its bargain status.

Furthermore, the extra 9% bottom-line rise forecast for 2018 creates a P/E multiple of just 12 times.

Dividend chasers have plenty to cheer about too, Playtech’s progressive dividend policy chucking out payout yields of 3.5% and 3.7% for this year and next. The firm lifted the payout 15% last year and I believe dividends should keep detonating as cash levels head through the roof.

Safe as houses

I believe retirement property builder McCarthy & Stone (LSE: MCS) is another hot FTSE 250 stock currently dealing at irresistible prices.

City brokers expect earnings at the construction colossus to leap 11% in the year to August 2017, leaving McCarthy & Stone dealing on a P/E ratio of 12.6 times and a PEG reading bang on the value watermark of one.

And expectations that earnings growth will rev to 28% in fiscal 2018 pushes McCarthy & Stone’s P/E ratio to 9.8 times, and PEG multiple to 0.3.

Dividend yields for 2017 and 2018 may be less impressive, at 2.7% and 3.2%, but to my mind they do not undermine the builder’s position as a stunningly-priced stock star.

Uncertainty following the EU referendum in June saw McCarthy & Stone’s order book cool down during the dying embers of last year. But the company has seen customer activity steadily picking up again more recently, the constructor noting this month that “lead sales indicators (enquirers, sales leads and visitors) [were] well ahead of the previous year” during September-March.

So with last year’s sales moderation appearing to be nothing more than a blip, and McCarthy & Stone pulling hard to meet its completions target of 3,000 units by 2019 (up 30% from current levels), I reckon the builder remains a compelling pick for stunning long-term earnings expansion.

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Royston Wild has no position in any shares mentioned. The Motley Fool UK has recommended Paddy Power Betfair. 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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