MacFarlane Group (LSE: MACF) has seen its share price slide in post-Bank Holiday trade following a less-than-electrifying reception to the release of latest trading details.
The stock was last 4% down on Tuesday, a meaty reduction but not indicative of shocking trading numbers. Rather, today’s mild reverse reflects a little bit of profit taking following the packaging materials provider’s titanic rise of recent weeks — its stock value shot 15% higher in the four weeks to today’s update.
MacFarlane announced today that group revenue charged 10.2% higher in the six months to June, to £89.8m, a result that pushed profit before tax 26.6% higher to £2.5m.
Celebrating the results, outgoing chairman Graeme Bissett said: “The strong performance in the first six months of 2017, supplemented by the expected seasonal uplift from the e-commerce sector in the second half of the year gives the Board confidence that its full-year expectations for 2017 will be achieved.”
The Glasgow-headquartered firm saw sales at its core Packaging Distribution arm rise 12% in the period, mainly reflecting the impact of recent acquisitions. Revenues at its Manufacturing Operations division fell 1% by comparison, although this reflected MacFarlane’s ongoing programme towards higher-margin sales.
A brilliant bargain
The City believes, like me, that MacFarlane is on course to record stunning earnings growth, and a 30% bottom-line rise is forecast for 2017. The good news does not stop there either, with the number crunchers predicting an extra 5% advance next year.
And forecasts make the company excellent value for money. MacFarlane currently sports a forward P/E rating of just 10.7 times, as well as a corresponding PEG multiple of 0.4.
I reckon this is a bargain considering the strong new business momentum it is currently experiencing, and particularly the progress the industrial giant making in the fast-growing internet segment. And the likely prospect of further successful acquisitions seals the investment case, in my opinion.
Global goliath
Whitbread (LSE: WTB) is another brilliant growth star I reckon is trading far too cheaply at the moment.
In 2017 the Costa Coffee and Premier Inn owner is expected to grind out a 4% bottom-line rise, and it is anticipated to follow this up with an 8% advance next year. As a consequence, the FTSE 100 giant deals on a very-undemanding prospective P/E ratio of 14.3 times.
Robust global demand for its hot drinks and cut-price hotel beds has kept profits on an upward climb for many years now. And I fully expect Whitbread’s sprightly expansion scheme to keep delivering chunky earnings expansion. Indeed, the Dunstable-based business plans to speed up acceleration of Costa in China and Premier Inn in Germany, in particular, thanks to roaring recent successes in these destinations.
Recent share price weakness has left Whitbread dealing at its cheapest since last December. And I believe this is a great time for dip buyers to grab a slice of the action.
