Share prices across the FTSE 100 and FTSE 250 have come under significant pressure in recent weeks. The FTSE 100, for example, is now down by around 10% from its record high in May. It’s therefore halfway towards a bear market. And with concerns surrounding the prospects for the world economy set to remain in place, it would be unsurprising for there to be further near-term declines.
One share which has fallen more than most in recent weeks is FTSE 250-listed Sirius Minerals (LSE: SXX). It’s down around 37% from its price in early August, following disappointing news. Could it be worth buying alongside another FTSE 350 share, which delivered an investor update on Thursday following a period of share price declines?
The company in question is sports-betting and gaming group GVC (LSE: GVC). Its third quarter trading update shows that it’s delivered strong growth and market share gains across all of its territories. Its online net gaming revenue has risen by 28%, with sports brands net gaming revenue up by 31%, and games brands net gaming revenue rising 19%. Group net gaming revenue increased by 14%, with strong growth in Italy helping to boost the performance of the business across Europe.
The integration of the Ladbrokes Coral businesses is progressing well. The company expects to report results for the full year which are in line with expectations. It remains optimistic about its prospects in the US, where it has entered into a joint venture in order to capitalise on the potential growth in sports betting.
Following a share price fall of 20% in less than three months, GVC now has a price-to-earnings growth (PEG) ratio of 1.4. This suggests that, while investor sentiment may weaken further, its long-term growth prospects remain impressive.
Alongside a number of resources companies, the Sirius Minerals share price has come under pressure in recent weeks. Concerns surrounding the outlook for the global economy have weighed on the resources sector, with the prospect of an elevated trade war likely to remain a key risk facing the sector over the coming months.
As well as external risks, the company has also faced internal challenges. The cost of the whole Sirius Minerals project is set to increase by at least $400m, and potentially by as much as $600m. Cost overruns are, of course, nothing new when it comes to major projects. Investors though, have cooled in their stance on the company, with its share price now trading only marginally higher than it was at the start of the year.
However, with Sirius Minerals seeming to have a sound long-term growth strategy, short-term price falls could present buying opportunities. According to the company, its long-term financial outlook remains relatively positive. As such, it seems to offer a more appealing investment outlook, with its risk/reward ratio appearing to be relatively positive when compared to a number of its industry peers.
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Peter Stephens owns shares of Sirius Minerals. The Motley Fool UK has recommended GVC Holdings. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.