A done deal?

Teledyne believes that the two companies will prove to be a good fit. It feels that its strong track record of acquiring and successfully integrating businesses into its network mean that the acquisition would be a sound move. Furthermore, it considers that the deal would allow it to enhance its customer proposition and growth dynamics. As such, E2V’s directors are backing the deal and are encouraging all shareholders to vote in favour of the takeover. They represent around 1% of the company’s share capital.

In addition to the 275p per share in cash, investors in E2V will receive an interim dividend of 1.7p per share, which will be paid on 20 December. Given that this amounts to just 0.6% of the offer price however, it’s unlikely to make a significant impact on the decision-making process of whether to accept or reject the bid approach.

A bright future

Clearly, E2V has a bright future. Putting the bid to one side, it’s expected to increase its bottom line by 11% in the next financial year. This follows a strong recent history of growth, with the company’s bottom line increasing at an annualised rate of 5.6% during the last five years. Despite the progress made by the business, it has traded on a relatively low forward price-to-earnings (P/E) ratio of around 12 prior to today’s offer. However, it now has a forward P/E ratio of around 17.5, which indicates that the bid is a fair price to pay for the company, given its track record and future outlook.

As such, it seems likely that the deal will progress, especially since it represents the highest share price the company has seen since the credit crunch. This means that even holders of the stock for a number of years are now likely to be in profit, and so are more likely to be tempted by the promise of an all-cash offer.

Sector appeal

Of course, the industrial sector remains an attractive investment proposition. For example, Morgan Advanced (LSE: MGAM) is expected to grow its bottom line by 8% in the next financial year. This puts it on a forward P/E ratio of 13.3, which indicates that it has upward rerating potential. Morgan Advanced should also benefit from the continued weakness of sterling, which could boost profitability while also making its shares more attractive to a foreign buyer. And with it having a yield of 3.7% that’s covered 1.9 times by profit, it remains a sound income play for the long term.

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The business warned that

“due to the increased possibility of further delays to the anticipated follow on orders in Space Imaging, the board now believes the trading performance for the current financial year may be modestly below our previous expectations.”

While E2V expects the division to complete three key follow-on orders during the second half of the year ending March 2017, the company advised that “the timings of these awards is not within our control.” The tech play also said that programme milestones for some of its space-related programmes will not be met until the latter half of the fiscal period.

E2V Technologies saw revenues dip 6% between April and September, to £102.8, achieved in what it describes as “challenging trading conditions.”

But the imaging specialist advised that order intake had improved during the second quarter, a factor that should underpin a better second-half performance. And E2V’s bubbly outlook is epitomised by its decision to raise the interim dividend to 1.7p per share from 1.6p last year.

Fiery forecasts

Still, many investors will be put off by the poor sales visibility created by difficult market conditions and uncertain contract completion. And in this regard, many stock pickers may be tempted by the solid growth outlook of fashion play Ted Baker (LSE: TED).

Like E2V Technologies, Ted Baker has a great record of generating solid earnings expansion in recent years, and the City believes this tale has much further to run — bottom-line growth of 13% and 14% are chalked in for the years to January 2017 and 2018 respectively.

By comparison, the trading troubles affecting E2V is expected to see earnings growth slow to 2% this year and to 8% for fiscal 2018. And today’s update is likely to lead to these forecasts being downwardly revised.

Forward P/E ratings of 22.2 times for 2017 and 19.4 times for 2018 make Ted Baker more expensive than E2V’s readings of 12 times and 11.1 times. But I believe the ‘street chic’ expert’s stronger revenues outlook merits this premium.

In good stead

Ted Baker saw group sales soar 14.4% during the 28 weeks to August 13^th, it advised last month, to £259.5m.

As well as reaping the fruits of its store expansion programme — Ted Baker opened new stores in the US, Canada and China in the period, as well as department store concessions in Europe and Asia — the London firm’s decision to bolster its e-commerce presence is also paying off in spades. Total online sales leapt 29.7% from the corresponding 2015 period, it noted, to £29.7m.

And Ted Baker is paying huge attention to developing the brand through innovative marketing campaigns, and by engaging increasingly through social media. Indeed, the company’s autumn/winter campaign launch, directed by Guy Ritchie, which included interactive elements, was met with much fanfare.

I reckon the star appeal of Ted Baker makes the stock a stronger growth candidate than E2V Technologies, in the near term and beyond.

The post Can E2V Technologies plc recover after falling 15% today? appeared first on The Motley Fool UK.

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Royston Wild has no position in any shares mentioned. The Motley Fool UK has recommended Ted Baker plc. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Tech treat

Thanks to its expertise across many tech areas, I reckon E2V Technologies (LSE: E2V) is in great shape to keep its earnings chugging higher in the near term and beyond. While the company still faces challenging conditions in some of its markets, E2V Technologies is bolstering its investment in core areas like semiconductor design to mitigate these problems and to win market share.

The City expects earnings at the company to nudge marginally higher in the year to March 2016 before gaining traction thereafter — good growth of 9% and 8% is chalked in for 2017 and 2018, respectively. Consequently E2V Technologies sports very attractive P/E ratings of 14.2 times and 13.4 times for these years.

Driving higher

I believe industrial chemicals maker Carclo (LSE: CAR) should also continue to print excellent profits growth as demand from the car sector explodes. The firm’s LED Technologies division builds lighting units for use in automobiles, and is rapidly expanding across Asia and the US to harness galloping demand for its products.

And helped by a steady stream of new product rollouts, the Square Mile expects Carclo to follow a 19% earnings explosion in the period to March 2016 with an even better 21% advance in both 2017 and 2018. I believe subsequent earnings multiples of 11.6 times and 9.6 times make Carclo a steal given the company’s rocketing momentum.

A financial favourite

Financial firm Arrow Global Group (LSE: ARW) — which buys and manages customer accounts from financial institutions — should also continue to enjoy strong earnings growth, in my opinion. The company is steadily diversifying across asset classes to provide its earnings outlook with that little bit of extra security. Meanwhile, acquisitions like that of Belgium’s InVesting BV for £78.5m this month are expanding Arrow Global’s exposure to lucrative foreign markets.

The number crunchers expect the business to follow last year’s 18% bottom-line leap with a 33% bounce in 2016, resulting in an ultra-low P/E readout of 10 times. And the multiple slips to just 8.3 times for next year thanks to predictions of an extra 21% earnings rise.

Bolts beauty

Industrial fastenings manufacturer Trifast (LSE: TRI) has a terrific record of delivering earnings growth year after year. The company’s wide product range makes it a favourite for blue-chip goods manufacturers the world over, and its bolts and screws can be found in everything from fridges and mobile phones to automobiles.

And surging demand for consumer goods should keep sales at Trifast trekking higher, in my opinion. Indeed, the City has forecast a 3% earnings advance in the year to March 2016, and 6% rises are estimated for both 2017 and 2018. I reckon subsequent P/E ratings of 13 times for this year and 12.3 times for 2017 represent terrific value for money.

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Royston Wild 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.

JD Wetherspoon

Booze behemoth Wetherspoons (LSE: JDW) worried the market in midweek business and was recently dealing 7.1% lower from Tuesday’s close. In its latest trading statement the Watford firm advised that “the recent government announcement regarding the ‘living wage’ adds considerable uncertainty to future financial projections in the pub industry”, adding to the considerable pressure on margins as the sector battles competition from supermarkets.

While investors should of course be taking Wetherspoons’ warning extremely seriously, I believe that the business still offers brilliant potential. The company is investing huge amounts into expanding its pub portfolio while also shuttering many of its underperforming outlets, a programme that helped propel total sales 6.5% higher during May-July. And Wetherspoons plans to open another 20-30 pubs next year, driving the number of its pubs to within a whisker of the magic 1,000 marker.

Accordingly the City expects earnings growth of 1% for the year concluding July 2015 to accelerate to 12% the following year, driving a P/E multiple of 15.6 times for the current period to just 14 times — any reading around or below 15 times is widely considered sterling value. And predicted dividends of 12.1p and 12.5p per share for 2015 and 2016 correspondingly create decent-if-hardly-barnstorming yields of 1.6% and 1.7% correspondingly.

E2V Technologies

Unlike Wetherspoons, semiconductor and imaging tech builder E2V Technologies (LSE: E2V) lit up the market in Wednesday’s session and was last dealing 1.3% higher on the day. The business advised in its latest update that despite witnessing ‘modest revenue growth‘ during April-June, caused by order weakness at its semiconductor arm, its full-year guidance remains unchanged.

Indeed, the Essex firm has previously laid out its intention to double EBIT by 2020, a goal that is likely to be underpinned by resplendent growth at its Space division. With ongoing restructuring at the firm also bolstering the bottom line, the City is in broad agreement that earnings are on an upward trajectory, and have pencilled in rises to the tune of 4% and 8% for the years ending March 2016 and 2017 respectively. As a result E2V Technologies boasts attractive P/E ratios of 16.1 times for this year and 15 times for 2017.

And these bubbly growth projections, allied with the impact of current restructuring on the company’s cash reserves, is expected to keep driving the dividend skywards, too. A projected payout of 5.1p per share last year is anticipated to advance to 5.4p in 2016, creating a yield of 2.3%, and to 5.8p in 2017, pushing the readout to 2.5%.

Lloyds Banking Group

Banking giant Lloyds (LSE: LLOY) (NYSE: LYG.US) has naturally enjoyed a share price bump after the Greek debt deal inked earlier this week, although advances have since pared back a bit and the firm was recently 0.1% higher on Wednesday. And I believe the stock is in great shape to continue rising as a buoyant British economy boosts demand from retail customers and business alike in the coming years.

Growth isn’t expected to take off at Lloyds in the near-term by any means — indeed, the City has pencilled in advances to the tune of just 1% and 2% in 2015 and 2016 respectively. However, it is hard to look past the terrific value these projections provide, with a P/E ratio of 10 times through to end-2016 smack on the barometer that represents excellent bang for one’s buck.

And this steadily-improving earnings picture, combined with the effects of massive restructuring on the balance sheet, is anticipated to drive dividends firmly higher in the years ahead. With Lloyds having got its payout policy back on track last year, the number crunchers now expect the banking giant to shell out rewards of 2.8p per share this year and 4.2p in 2016. Consequently a chunky 3.3% yield for 2015 leaps to a market-mashing 4.9% for next year.

The post Should You Buy JD Wetherspoon plc, E2V Technologies PLC And Lloyds Banking Group PLC? appeared first on The Motley Fool UK.

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Royston Wild 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.