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Two great stocks on sale I may buy

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Gold bullion on a chart
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Entertainment One Limited (LSE: ETO) has enjoyed quite a share price spurt since I last wrote about the stock last July.

The television and film giant has swelled 35% in value since then, even hitting its highest for almost two-and-a-half years earlier in January at around 330p per share. Despite this rapid ascent however, it can still be picked up for next to nothing.

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Thanks to a forecast 5% earnings rise in the 12 months to March 2018, it trades on a prospective P/E multiple of 14.9 times.

On paper this clearly represents solid value. But considering that City analysts are expecting profits expansion to really light up soon — bottom-line growth of 15% and 12% is estimated for fiscal 2019 and 2020 respectively — this makes the FTSE 250 firm an absolute steal in my opinion.

It’s a family affair

It isn’t difficult to see why the Square Mile is expecting profits to detonate at Entertainment One.

Firstly, the momentum of the London company’s Family division is something to behold — sales here jumped 64% between April and September, to £62.1m.

Its Peppa Pig series has long been the gift that keeps on giving, and there is plenty more left in the tank as the franchise moves into China. The firm aims to treble the number of franchises up and running in the country by the end of the March, to 60.

But the popular porker is no longer the only crowd pleaser to shout about, the company’s PJ Masks series also gaining traction in major territories. Sales here exploded 600% during the first fiscal half to £22.3m thanks to leaping licensing and merchandising revenues. Turnover looks likely to continue booming too as Entertainment One seeks to expand the brand across Europe, Asia and Australasia.

The company’s Television unit is also making tracks. Revenues here rose 17% in the half to £168.5m, thanks to new productions at the now totally-owned Mark Gordon Company, as well as larger international distribution sales for third party productions and content. So there is plenty to get excited over, in my opinion.

A gold-plated bargain

A strong outlook for previous metals prices also leads me to believe that Petropavlovsk (LSE: POG) could prove a terrific pick for growth hunters.

Signals last week from the White House that President Trump favours a weak dollar to boost US trade indicates that currency movements should continue to boost demand for greenback-denominated assets like gold. But aside from these foreign exchange tailwinds, there remain plenty of political and economic levers across the globe that could bolster bullion values in 2018 and beyond.

Meanwhile, Petropavlovsk continues to steadily hike production to latch onto this favourable environment, and in 2017 it produced 439,600 ounces of the yellow metal, up from 400,200 ounces a year earlier. In the current period some 420,000-460,000 ounces is expected, including first production from the company’s flagship POX Hub from September.

So City analysts expect the Russian digger to follow a predicted 26% earnings rise last year with an extra 56% advance in 2018. A subsequent forward P/E ratio of 6 times is too cheap to pass on, in my opinion.

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Royston Wild has no position in any of the 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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