The Motley Fool

Is Now The Perfect Time To Buy Informa PLC, Banco Santander SA & Shire PLC?

Shares in publishing and events company Informa (LSE: INF) have surged by over 6% today after the company reported a rise in profit for the first half of the year as well as confirming its guidance for the full year. In fact, its pre-tax profit for the half year to the end of June was up by over 20%, with it rising from £100m in the first half of 2014 to £122m in the first half of the current year.

A key reason for this is an improving global macroeconomic outlook, with Informa benefiting from a continued loose monetary policy across much of the developed world that is helping to boost business confidence. Furthermore, Informa remains committed to its growth acceleration plan that should see it reinvest up to £90m in the business over the next three years. And, with strong cash flow, further acquisitions appear to be affordable, with previous acquisitions such as the Hanley Wood and Virgo exhibition business in 2014 having a positive impact on the company’s financial performance in the current year.

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Looking ahead, though, Informa is expected to post just a 1% rise in underlying earnings this year, followed by growth of 3% next year. This is rather disappointing at a time when many of Informa’s FTSE 250 peers are set to post double-digit growth over the next two years. And with Informa trading on a price to earnings (P/E) ratio of 14.2, there appear to be better options elsewhere.

For example, the likes of Santander (LSE: BNC) and Shire (LSE: SHP) currently offer superb long-term growth potential. Both companies have had a somewhat challenging twelve months, of course, with Santander conducting a placing, slashing its dividend and undergoing a refreshed strategy that will see it retain its wide regional diversity. Meanwhile, Shire was the subject of a takeover attempt by AbbVie that ultimately did not work out, which hurt investor sentiment in the company for a period of time.

However, looking ahead, Shire is expected to post growth in its earnings of 16% next year which, given the troubles that many of its pharmaceutical peers find themselves in, would be a very impressive result. And, despite such strong growth prospects, Shire trades on a price to earnings growth (PEG) ratio of just 1.2, which indicates that the company’s shares continue to offer excellent value for money despite having soared by 23% since the turn of the year.

Similarly, Santander also offers strong growth prospects, with double-digit growth forecast in each of the next two years. And, despite having a much stronger growth outlook than Informa, Santander trades at a discount to Informa, with it having a P/E ratio of just 12.2. This indicates that there is significant upside potential on offer from an upward rerating over the medium to long term. This scenario, of course, becomes increasingly likely as the challenges within the Eurozone begin to fade, thereby making Santander an excellent long-term buy.

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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.