These two companies both released news today and the market has reacted positively towards each. Does this mean the shares are a buy?
Retirement products in demand
Specialist retirement company JRP Group (LSE: JRP) released half-year results today, which sent the shares up nearly 20% to 115p. The group was formed through the merger of Just Retirement and Partnership Assurance in April this year. Synergies from the merger have already totalled £15m and the synergy target for the end of 2018 has been increased 13% to £45m. This is obviously a huge saving over the next few years and much higher than initial expectations.
The company is doing well and reported an operating profit of £51m along with a £226m profit after tax for the first six months of the year. Group CEO Rodney Cook stated that “our new business margin is starting to demonstrate the opportunity we have for potential further improvement as we deliver the cost synergies.”
The stock received another boost this morning as Numis reiterated its 200p price target on the stock, which indicates that there’s a significant amount of upside from its current 115p valuation. If the business continues to perform well and more synergies can be squeezed out of the merger then the 200p valuation could become a reality.
Rockhopper Exploration (LSE: RKH) received some great news today that goes a long way in de-risking the Falkland Islands from a political standpoint. The British Government and the Government of Argentina have agreed to an improved relationship through closer co-operation on various matters. The governments “agreed to work toward removing restrictive measures around the oil and gas industry, shipping and fishing affecting the Falkland Islands in the coming months.” This will provide a great boost to the company as hostile rhetoric from the Argentinian government was becoming worrying.
This news provides a further cause for celebration after Rockhopper’s half-yearly results. Yesterday the company announced that 2C oil resources in the Sea Lion Complex are now thought to be 517 mmbbl. The amount of investment required for first oil has also fallen to US$1.5bn (gross), which in turn has reduced the project’s break-even price to US$45 per barrel. This is good news for Rockhopper and shares are up 9% since the updated figures were released to the market yesterday morning.
JRP and Rockhopper both seem to be on an upward trend and both have seen a great response to positive news. There’s a lot of upside in the shares and I think that both could be worth buying in the not too distant future. In the case of JRP it may be best to wait for a fall-back after the huge rise today. Rockhopper on the other hand has fallen over the last three months and it may be worth buying the shares if it suits your risk profile.
Jack Dingwall has no position in any shares mentioned. 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.