Shares in online price comparison website Moneysupermarket.Com (LSE: MONY) have tumbled by as much as 9% today. That’s despite it releasing an update that stated adjusted operating profit for the full year is now expected to be ahead of expectations. A figure of £99m versus guidance of £98.3m is due to be reported for 2015.
A possible reason for the company’s share price decline is a fall in revenue from its insurance division. Moneysupermarket.Com experienced stronger-than-anticipated competitor marketing activity during the year and decided to maintain its margins rather than cut prices. As such, fourth quarter revenue increased by 5%, while for the full year it was much higher at 14%. However, the company is introducing initiatives to bring momentum back to its insurance business during the course of 2016.
Looking ahead, Moneysupermarket.Com is expected to record a rise in earnings of just 7% in 2016. When this is combined with a price-to-earnings (P/E) ratio of 21.5, plus the potential for further challenges in its insurance division, it makes the stock a relatively unappealing buy at the present time.
Benefitting from volatility
Meanwhile, spread betting provider IG Group (LSE: IGG) today announced the appointment of an interim Chief Financial Officer (CFO). Due to the rise in market volatility in recent months, it’s likely to be a beneficiary since trading activity for spread betting providers tends to increase during the more challenging periods for the stock market. Evidence of this can be seen in IG’s first quarter update that showed client activity spiked in August at a time when the FTSE 100 was particularly volatile.
Looking ahead, IG is expected to increase its bottom line by 10% in the current year and with it trading on a P/E ratio of 16.3, it appears to offer good value for money. That’s especially the case since stock markets are set to remain uncertain and highly volatile over the coming months.
Take a look
Another stock that seems to be worth buying is Vodafone (LSE: VOD). Its shares have outperformed the FTSE 100 by 13% in the last three months. And with the European economy set to deliver improved growth numbers due to the impact of quantitative easing, further gains could be on the cards.
In addition, Vodafone’s diversification into broadband and pay-TV is also likely to be beneficial to its sales and profit outlook. That’s because it should provide considerable cross-selling opportunities, while also reducing Vodafone’s reliance on telecoms sales for its revenue. And with Vodafone having a strong balance sheet, further acquisition activity could be a feature of 2016 as it seeks to take advantage of asset prices that may still be discounted to their intrinsic value.
With Vodafone having a yield of 5.3% and being forecast to increase its earnings by 19% in the next financial year, now could be a logical time to buy it.
Peter Stephens owns shares of Vodafone. The Motley Fool UK has recommended Moneysupermarket.com. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.