Why WYG PLC And Patisserie Holdings PLC Could Be Worth Buying After Surging Over 10% Today

Is now the right time to add these 2 strong performers to your portfolio? WYG PLC (LON: WYG) and Patisserie Holdings PLC (LON: CAKE)

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

WYG

Shares in WYG (LSE: WYG) are as much as 11% higher today after the company made an announcement stating that it is currently conducting a major strategic review. This is highly significant news for shareholders of the company, since it could mean that WYG is acquired and made part of a larger group – hence the bid premium that now appears to be included in the company’s share price.

Of course, a strategic review can come to the conclusion that things are best left as they are, which could cause today’s spike to be reversed. Or, it could mean that WYG enters into a strategic partnership with another company in the hope of gaining synergies and reducing risk.

Either way, WYG continues to offer a bright future as an investment. For example, it trades on a price to earnings (P/E) ratio of 16.5 but, when its earnings growth forecast of 35% for next year is taken into account, the resulting price to earnings growth (PEG) ratio of 0.3 seems to equate to growth at a reasonable price. As such, and while its short-term performance is likely to be very volatile, WYG could be worth buying for the medium to long term.

Patisserie Holdings

The owner of Patisserie Valerie, Patisserie Holdings (LSE: CAKE), has seen its share price surge by over 10% today despite a lack of major news flow being reported. This gain continues the momentum that has seen the company’s share price soar by over 38% in the last three months alone, with its excellent full-year results seemingly being the main catalyst.

For example, Patisserie Holdings reported an increase in adjusted EBITDA of 27% in the year to the end of September 2014 and, looking ahead, its future prospects appear to be relatively bright, too. That’s because in the year to September 2016 it is forecast to grow its bottom line by 17% and, when combined with its P/E ratio, this equates to a PEG ratio of 1.1, which means that the company offers strong growth potential at a very reasonable price.

Furthermore, Patisserie Holdings currently yields 1.3% and, with dividends forecast to rise at a rapid rate (they are due to be 16.2% higher next year) it could become a realistic income play over the long term, too. In addition, it has an enviable estate location that could benefit from an increase in UK consumer spending due to the real terms increases in disposable income that are being pencilled in for the current year. As such, it could be worth buying at the present time.

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.

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.

More on Investing Articles

Passive income text with pin graph chart on business table
Investing Articles

Yields of up to 7%! I’d consider boosting my income with these FTSE dividend stocks

The London market has some decent-looking dividend stocks right now, and I’m tempted by these two for growing income streams.

Read more »

Young mixed-race couple sat on the beach looking out over the sea
Investing Articles

I’d put £20K in an ISA now to target a £1,900 monthly second income in future!

Christopher Ruane shares why he thinks a long-term approach to investing and careful selection of shares could help him build…

Read more »

Mature couple at the beach
Investing Articles

6 stocks that Fools have been buying!

Our Foolish freelancers are putting their money where their mouths are and buying these stocks in recent weeks.

Read more »

Black woman using loudspeaker to be heard
Investing Articles

I was right about the Barclays share price! Here’s what I think happens next

Jon Smith explains why he still feels the Barclays share price is undervalued and flags up why updates on its…

Read more »

Investing Articles

Where I’d start investing £8,000 in April 2024

Writer Ben McPoland highlights two areas of the stock market that he would target if he were to start investing…

Read more »

View of Tower Bridge in Autumn
Investing Articles

Ahead of the ISA deadline, here are 3 FTSE 100 stocks I’d consider

Jon Smith notes down some FTSE 100 stocks in sectors ranging from property to retail that he thinks could offer…

Read more »

Young female business analyst looking at a graph chart while working from home
Investing Articles

Why I think Rolls-Royce shares will pay a dividend in 2024

Stephen Wright thinks Rolls-Royce shares are about to pay a dividend again. But he isn’t convinced this is something investors…

Read more »

Investing Articles

1 of the best UK shares to consider buying in April

Higher gold prices and a falling share price have put this FTSE 250 stock on Stephen Wright's list of UK…

Read more »