Shares in Capita (LSE: CPI) fell by more than 7% today, with investor sentiment in the company declining as doubts continue regarding its bid pipeline and contract losses. Indeed, Capita has secured £1.6 billion of contracts so far this year, which is well behind the figure of £2.9 billion from the same time last year, with its bid pipeline also down at £4.1 billion from £5.7 billion at the same time last year.
Despite this, Capita has stated that it remains on track to meet full-year expectations, which include a 100% cash conversion rate. Furthermore, additional acquisitions are planned and, together with organic growth, means that Capita is set to post earnings growth of 8% in each of the next two years. With shares in the company trading on a price to earnings (P/E) ratio of 16.2, though, they still seem to be rather richly priced even after today’s share price fall.
Rare Earth Minerals
Shares in Rare Earth Minerals (LSE: REM) dropped down 4% this morning despite the company releasing encouraging news regarding its Yangibana project in Western Australia. Indeed, the mineral resource at the project has more than doubled, with the total mineral resource of rare earth oxides increasing to 103,000 contained tonnes, up from the previous 45,000 contained tonnes.
Furthermore, Rare Earth Minerals also announced that recently taken aerial photography also shows that mineralisation continues to the west of Yangibana North, which could provide the opportunity for additional shallow mineralisation to take place.
In addition, the company also announced today that it is assessing its strategic options in the development of its interest in two joint ventures (Fleur-El Sauz and Megalit), as well as increasing its stake in its joint venture partner in the Sonora Lithium Project in Mexico, with its holding in Bacanora now being 12%.
Therefore, the share price fall of Rare Earth Minerals today could be due to profit taking, since news flow seems to be encouraging.
A 15%+ fall in the share price of Proteome Sciences (LSE: PRM) has taken place today, with the protein biomarker company announcing that full-year revenue will not meet market expectations.
The reason for this is further contract delays, some of which were highlighted in its September interims, with Proteome not expecting to realise the revenue next year, either. The result is a top line that looks set to be below last year’s level and weak sentiment in the company’s shares.
Although there could be more positive news on the horizon, with Proteome currently in talks to out-license diagnostic applications for the detection of Alzheimer’s disease and cognitive impairments, sentiment could weaken further due to the relatively large degree of uncertainty surrounding the company’s near-term prospects. As such, further share price falls could take place until more detail is provided regarding future sales levels.
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Peter Stephens has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.