Are Jimmy Choo plc, Servelec Group plc, Aveva Group plc and Severfield plc ‘buys’ after today’s updates?

Should you pile into these four major movers? Jimmy Choo plc (LON: CHOO), Servelec Group plc (LON: SERV), Aveva Group plc (LON: AVV) and Severfield plc (LON: SFR).

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Shares in luxury accessories brand Jimmy Choo (LSE: CHOO) have risen by 15% today after it reported a positive trading update. It stated that the company has made a good start to the year and trading is in line with its expectations. That’s despite the challenging outlook facing the sector, with Jimmy Choo’s focus on controlled expansion and the development of its retail portfolio set to benefit its top and bottom lines.

With Jimmy Choo on track to deliver cost savings and efficiencies, the outlook for its margins is upbeat. It’s expected to record a rise in earnings of 26% in the current year, followed by further growth of 20% next year. This puts Jimmy Choo on a price-to-earnings growth (PEG) ratio of just 0.7, which indicates that now could be a good time to buy it.

Upside potential

Also rising today are shares in Severfield (LSE: SFR), with the structural steelwork specialist soaring by over 11%. That’s due to it releasing an upbeat set of results for the year to 31 March, with sales up by 19% and underlying profit before tax increasing by 59% as operational improvements and efficiencies delivered over the last three years have begun to have an impact.

Looking ahead, Severfield is expected to increase its bottom line by 26% in the current year and by a further 22% next year. This has the potential to improve investor sentiment in the stock and with Severfield trading on a PEG ratio of only 0.4, there’s considerable upside potential on offer.

Profit warning

Meanwhile, falling heavily today are shares in Servelec (LSE: SERV), with the technology and software group recording a decline in its valuation of 34%. This is due to a profit warning, with Servelec having previously expected a heavier weighting towards the second half of the year than had historically been the case. However, given further slippage in contracts Servelec now expects to miss guidance for the full year.

With Servelec trading on a price-to-earnings (P/E) ratio of 15.4 prior to today’s update, its shares were already relatively expensive. While they’re now clearly much cheaper, there could be further falls to come in the short run as investors take stock of today’s update. Therefore, it may be prudent to avoid their purchase at the present time.

Gains reversed

Also falling today are shares in Aveva (LSE: AVV). The technology company is down by 12% after it announced that it’s no longer in talks with Schneider Electric regarding a potential combination between the two companies. Clearly, this is somewhat disappointing for Aveva and means that the gains following the news that talks were taking place have now been reversed.

Looking ahead, Aveva remains a business that’s struggling to deliver improved performance and with its profitability likely to come under further pressure over the medium term, there seem to be better options elsewhere within the technology space for long-term investors.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Peter Stephens owns shares of Jimmy Choo. 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.

More on Investing Articles

Investing Articles

Could the JD Sports Fashion share price double in the next five years?

The JD Sports Fashion share price has nearly halved in the past five years. Our writer thinks a proven business…

Read more »

Bus waiting in front of the London Stock Exchange on a sunny day.
Investing Articles

If interest rate cuts are coming, I think these UK growth stocks could soar!

Falling interest could be great news for UK growth stocks, especially those that have been under the cosh recently. Paul…

Read more »

Investing Articles

Are these the best stocks to buy on the FTSE right now?

With the UK stock market on the way to hitting new highs, this Fool is considering which are the best…

Read more »

Petrochemical engineer working at night with digital tablet inside oil and gas refinery plant
Investing Articles

Can the Centrica dividend keep on growing?

Christopher Ruane considers some positive factors that might see continued growth in the Centrica dividend -- as well as some…

Read more »

Smiling family of four enjoying breakfast at sunrise while camping
Investing Articles

How I’d turn my £12,000 of savings into passive income of £1,275 a month

This Fool is considering a strategy that he believes can help him achieve a stable passive income stream with a…

Read more »

Person holding magnifying glass over important document, reading the small print
Investing Articles

2 top FTSE 250 investment trusts trading at attractive discounts!

This pair of discounted FTSE 250 trusts appear to be on sale right now. Here's why I'd scoop up their…

Read more »

Smiling young man sitting in cafe and checking messages, with his laptop in front of him.
Investing Articles

3 things that could push the Lloyds share price to 60p and beyond

The Lloyds share price has broken through 50p. Next step 60p? And then what? Here are some thoughts on what…

Read more »

Young female business analyst looking at a graph chart while working from home
Investing Articles

£1,000 in Rolls-Royce shares a year ago would be worth this much now

Rolls-Royce shares have posted one of the best stock market gains of the past 12 months. But what might the…

Read more »