Should You Buy Monitise Plc, Premier Oil PLC And Low & Bonar plc After Their Share Prices Soar?


Shares in Monitise (LSE: MONI) have risen by as much as 8% today, although there is no significant news flow to justify such a strong move. Of course, on the one hand Monitise remains a company that is difficult to invest in, simply because it is reviewing its strategic options at the present time and, with such uncertainty, many long-term investors may feel that its future is too much of a ‘known unknown’ for it to be investable.

However, others may argue that the potential for a bid, or for the break-up of the company, could make it a strong buy at the present time. Clearly, it has a product that works well and has a very bright future but, even after today’s 8% gain, market sentiment seems to be very much against it. For example, its shares are still down 44% in the last month and, in the short term, could come under more pressure even in spite of today’s rise.

Premier Oil

With the oil sector rallying, it is of little surprise that shares in Premier Oil (LSE: PMO) are up today by as much as 8%. Clearly, further changes to the oil price and to its outlook will continue to be the major driver of Premier Oil’s share price in the short term but, looking at its longer-term future, it seems to be worth buying at the present time.

That’s because it offers a very wide margin of safety. For example, Premier Oil trades on a price to earnings (P/E) ratio of just 13.3 even when next year’s forecast fall in earnings of 52% is taken into account. So, even if the oil price were to fall further, its share price may not react as unfavourably as is currently being priced in which, on the flip side, could mean that it surprises on the upside if the oil price does stabilise and ticks upwards.

As such, Premier Oil could be a sound long term buy, although investors in the company should expect further volatility in the short run.

Low & Bonar

Shares in performance materials company Low & Bonar (LSE: LWB) are up as much as 10% today after it reported flat pre-tax profit due to a weak Euro and a loss from its Saudi Arabian joint venture. However, the company continues to offer excellent investment potential and, with its shares trading on a very appealing valuation, seems to be worth buying at the present time.

For example, Low & Bonar is expected to increase its bottom line by 4% in the current year and by a further 11% next year. Despite this impressive rate of growth, its shares currently trade on a P/E ratio of just 10 and this equates to a price to earnings growth (PEG) ratio of just 0.8, which indicates that its share price could continue to make gains over the medium term.

In addition, Low & Bonar also has a top-notch yield of 4.9%, thereby highlighting its income, as well as growth and value, potential. As such, it seems like a ‘buy at the present time.

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Peter Stephens has no position in any shares mentioned. The Motley Fool UK owns shares of Monitise. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.