Shares in Judges Scientific (LSE: JDG) have fallen by over 20% today after the scientific instrument specialist issued a profit warning. In an AGM statement the company said it hasn’t seen a pick-up in order bookings since its last update in March. This is unlike the previous two years when Judges Scientific started the financial year rather slowly and saw demand rise. So the company’s interim results will be negatively impacted and should the trend continue, its full-year results will be too.
Clearly, this is disappointing news for the company’s investors and in the short run, investor sentiment could weaken yet further. And with the company’s outlook being rather challenging, it would be unsurprising if there were additional falls in its share price.
Of course, Judges Scientific remains a high quality business with a bright long-term future. As such, now could be a good time for long-term investors to buy it at a discount to its intrinsic value, although further volatility in its share price seems likely in the short run.
Sweett spot
While Judges Scientific has fallen heavily today, shares in Sweett Group (LSE: CSG) have soared by around 50% after it reached an agreement on a £24m cash offer for the company. The acquiring company is Canadian engineering consultant WSP and the offer price of 35p per share represents a 52% premium to the closing price of 23p on 24 May and a 74% premium to Sweett Group’s average price of 20p during the last six months.
Although the offer may seem to be a good one due to the premium over Sweett’s share price, it values Sweett on a price-to-earnings (P/E) ratio of just 8.1. And with bottom line growth of 15% forecast in the next financial year, the outlook for the company’s share price was relatively positive. As such, and while Sweett’s investors may now be sitting on significant profits, there could have been greater profits in the long run if it wasn’t the subject of a bid approach.
Meanwhile, shares in IGAS Energy (LSE: IGAS) have risen by over 10% today after it released an upbeat AGM statement. Encouragingly, production remains stable, with guidance for the full year still being in the range of 2,500 and 2,700 barrels of oil equivalent per day (boepd). And due to expected operating costs of $30 per barrel, IGAS seems to be in a relatively strong position with oil trading at just below $50 per barrel.
In addition, progress continues against the company’s five year shale development plan and it expects to spud two carried wells in the first half of 2017. And with IGAS having £22.5m in cash, it appears to have a relatively sound balance sheet through which to invest for its long-term future. As such, and while there’s still a large degree of uncertainty surrounding the wider resources sector, IGAS could be of interest to less risk-averse investors.
