Is Now The Perfect Time To Buy BT Group plc, Zytronic PLC And Shire PLC?

Shares in touch screen manufacturer Zytronic (LSE: ZYT) are up by 11% today after the company released a very positive trading update. It shows that Zytronic has made excellent progress in the second half of the year, with sales rising by 13% in the final quarter of the year versus the fourth quarter of 2014. This increase in revenue, alongside further production efficiencies and capital investments, means that the company expects its full-year profit to be materially ahead of expectations.

Prior to this statement, growth in earnings of 11% had been forecast for the full-year. So Zytronic appears to be making excellent progress as a business, with further growth of 19% being forecast for next year. As such, it trades on a price to earnings growth (PEG) ratio of just 0.6, which suggests that its shares remain a strong buy, even after today’s double-digit rise. And, with the company yielding a hugely impressive 3.2% from a dividend which is covered twice by profit, it’s a sound income play, too.

Similarly, pharmaceutical company Shire (LSE: SHP) also appears to be worth buying at the present time. That’s at least partly because its share price has fallen by around 20% since it announced details of an offer for sector peer Baxalta. The combination of the two companies would, according to Shire, create a global leader in rare diseases which would be capable of delivering $20bn in product sales by 2020. It would also offer significant operating synergies and potentially post double-digit sales growth in the medium to long term, according to Shire.

However, even if the deal does not come off, Shire on its own appears to be a sound investment. It has a strong pipeline of drugs and trades on a price to earnings growth (PEG) ratio of 0.9 which, given its aim of doubling sales in the coming years, indicates that its shares should rise in 2016 and beyond.

The present time, though, may not be the perfect moment to buy a slice of BT (LSE: BT.A). That’s because the company may be heading towards a quad play price war, with an increasing number of operators within the landline, broadband, pay-tv and mobile space fighting over a finite number of customers. As a result, there is huge competition within the quad play space and, crucially, there is little value for any of the providers of the four services to add from a customer perspective beyond a lower price.

In other words, it seems unlikely that customers will suddenly flock to have all of their media and telecom needs serviced by one operator, since having two, three or even four providers is not a particularly challenging or stressful situation when direct debits are the norm. As such, BT may see its margins squeezed as price becomes the most obvious differentiator, meaning that its shares could be worth avoiding at the present time.

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Peter Stephens owns shares of Zytronic. 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.