1 FTSE All Share stock (down 20% today) to buy right now

This struggling FTSE All Share company’s share price slumped on results day. But it’s still up 35% since its December 2021 low point.

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So what is James Fisher & Sons (LSE: FSJ), and why did the FTSE All Share stock fall 20% on Thursday? And why does it make me sit up and think it might be a share to buy right now?

The price dip came after 2021 full-year results. The company is in the marine services business, which has been under pressure. For 2021, Fisher & Sons reported a statutory loss before tax of £29m. But I think that headline figure hides a company with attractive long-term potential.

Covid-19 hit the FTSE sector hard. Chief executive Eoghan O’Lionaird said that “2021 was a challenging and disappointing year for the group. We experienced ongoing disruption from the global pandemic, our markets did not recover at expected rates, and we underestimated the headwinds faced by some of our businesses“.

I do like it when a CEO tells it like it is and doesn’t try to sugar coat bad news with waffly marketing speak.

Better than it seems?

There’s one thing that immediately makes me think things might not be as bad as they seem. The reported loss for 2021 covered a number of one-offs. Excluding those produces an underlying operating profit of £28m.

I know it can be risky relying on underlying figures. FTSE companies report them all the time, and some turn out to be more reliable than others. Who knows what other one-offs might hit the current year?

But it does at least make me think there’s a potentially healthy operating environment here, if Fisher & Sons can get past its rough few years. It just might be a good time to buy right now.

A FTSE recovery stock?

For Fisher to be a good investment for the medium term and beyond, it will first need to survive its short-term crisis. So what does the balance sheet look like? Well, there is significant debt on the books. But it is heading in the right direction.

At the end of 2021, the firm was saddled with £185.6m in net debt. For a FTSE company with a market cap of £195m, that’s a lot. But that figure does include finance leases and right of use liabilities. Actual bank net borrowing comes in at a less painful £139.6m.

And the total figure is £12.5m better than the previous year, which ended with net debt of £198.1m. Bank net borrowings are notably lower than 2020 too, down from £165.6m.

Buy right now?

The difficult question is how to put a valuation on the Fisher share price right now. Thought the results day fall is painful, it’s really only giving up some of the stock’s 2022 recovery. The shares have lost 56% over the past 12 months, while the FTSE All Share is down a modest 3%. But Fisher is still up 35% since a 52-week low in December.

To summarise, I am definitely seeing a risky investment here. Another “challenging and disappointing year” could result in a further share price collapse. But if the company can get back close to pre-slump earnings levels, we could be looking at a price-to-earnings multiple in low single digits.

Does that make it a share to buy right now? It’s definitely on my list for my next investment.

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 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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