Should you buy these 3 stocks following today’s results?

Are these three companies ripe for investment?

| 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.

These three stocks have all released results today, but are any of them worth adding to your portfolio right now?

Aggreko

Shares in power solutions specialist Aggreko (LSE: AGK) have fallen by 12% today after it released a disappointing set of first half results. A lower oil price has continued to impact negatively on a number of its key markets, with Aggreko’s sales falling by 12% and trading profit being 27% lower than in H1 2015.

Aggreko faces a challenging outlook, but has maintained its dividend and guidance for the full year. And its order intake in the Power Solutions Utility division of 875MW shows that it’s making progress nonetheless. However, an increase in business debtor provisions of $17m shows that its near-term financial outlook remains highly uncertain.

For the full year, Aggreko is expected to report a fall in earnings of 6%. With its shares trading on a price-to-earnings (P/E) ratio of 15.9, it seems to be overvalued right now given the downbeat prospects within a number of its key markets. Therefore, there may be superior risk/reward opportunities available elsewhere.

Devro

Also reporting today was collagen products specialist Devro (LSE: DVRO). Its shares have declined by 6% as its sales for the first half were only marginally higher than in the same period in 2015. Despite this, underlying profit for the period was ahead of 2015’s number by over 15% as improved manufacturing efficiencies, lower input costs and exchange rate benefits more than offset the negative impact of lower sales volumes.

Looking ahead, Devro’s transformation programme has reached its final phase, with the next stage of its strategic development being focused on growing sales. Devro intends to do this through improved commercial capabilities and increased product differentiation.

Devro is on track to meet its full year guidance, with the company forecast to increase its earnings by 7%. It’s then due to record a rise in earnings of 15% next year and with its shares trading on a price-to-earnings growth (PEG) ratio of just 1, it seems to offer excellent value for money at the present time.

Moneysupermarket

Meanwhile, Moneysupermarket (LSE: MONY) has today announced that its CEO will step down on or before the company’s AGM in May 2017. It has also released an impressive set of first half results that show a rise in sales of 10% and an increase in statutory after-tax profit of 25%. These rises were led by strong performances in the company’s Money and Home Services segments, with momentum now returning in the Insurance division.

Looking ahead, the company is on target to meet full-year expectations, with its bottom line forecast to rise by 5% this year. Further growth of 8% is pencilled-in for next year and while this is in line with the expected growth rate of the wider market, Moneysupermarket’s valuation seems to be rather high. It has a PEG ratio of 2.2 and while saving money may become more relevant following the EU referendum as the UK economy experiences an uncertain period, there could be better investment opportunities available elsewhere.

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 has no position in any shares mentioned. The Motley Fool UK owns shares of and has recommended Devro. 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.

More on Investing Articles

Young mixed-race couple sat on the beach looking out over the sea
Investing Articles

I’d put £20K in an ISA now to target a £1,900 monthly second income in future!

Christopher Ruane shares why he thinks a long-term approach to investing and careful selection of shares could help him build…

Read more »

Mature couple at the beach
Investing Articles

6 stocks that Fools have been buying!

Our Foolish freelancers are putting their money where their mouths are and buying these stocks in recent weeks.

Read more »

Black woman using loudspeaker to be heard
Investing Articles

I was right about the Barclays share price! Here’s what I think happens next

Jon Smith explains why he still feels the Barclays share price is undervalued and flags up why updates on its…

Read more »

Investing Articles

Where I’d start investing £8,000 in April 2024

Writer Ben McPoland highlights two areas of the stock market that he would target if he were to start investing…

Read more »

View of Tower Bridge in Autumn
Investing Articles

Ahead of the ISA deadline, here are 3 FTSE 100 stocks I’d consider

Jon Smith notes down some FTSE 100 stocks in sectors ranging from property to retail that he thinks could offer…

Read more »

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

Why I think Rolls-Royce shares will pay a dividend in 2024

Stephen Wright thinks Rolls-Royce shares are about to pay a dividend again. But he isn’t convinced this is something investors…

Read more »

Investing Articles

1 of the best UK shares to consider buying in April

Higher gold prices and a falling share price have put this FTSE 250 stock on Stephen Wright's list of UK…

Read more »

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

The market is wrong about this FTSE 250 stock. I’m buying it in April

Stephen Wright thinks investors should look past a 49% decline in earnings per share and consider investing in a FTSE…

Read more »