While enduring no little earnings turbulence in recent times, the IT services star is expected to rise to greatness with a 20% bottom-line advance in 2017. And the good news does not stop here, an 8% charge is also forecast for next year.

These projections make Servelec a brilliant bargain, in my opinion. Not only does the company’s forward P/E ratio clock in at 15 times — bang on the widely-regarded value watermark — but the Sheffield firm also carries a cheap sub-1 PEG ratio of 0.8.

Software star

Tough market conditions have caused Servelec plenty of headache in recent times, a 3% earnings decline in 2016 forcing pre-tax profit to clatter 29% lower to £9.5m.

But the tech giant has been engaged in ambitious restructuring to help it recover from tough trading conditions. As well as continuing to hike investment in product development (Servelec shelled out £5.2m last year alone), the Yorkshire firm has also been busy on the acquisition front. It gobbled up Synergy and Abacus last spring to bolster the social care and education aspects of its HSC division.

And it is confident that sales should return to growth from this year as its key markets improve. Business at its Automation division has ticked higher again more recently, the firm advising that significant contract wins helped drive sales higher during the fourth quarter of 2016.

And revenues at HSC should benefit from system upgrades in the social care market that should drive procurement activity, Servelec recently announced. Furthermore, “sales of our mobile solutions and the digital transformation of the NHS in the community, mental health and child health sectors” provide additional opportunities, it believes.

With cost-cutting also moving through the gears, I believe it could be on the verge of delivering brilliant earnings expansion.

Bullion beauty

I also believe a case could be made that Shanta Gold (LSE: SHG) is grossly undervalued by the market.

The Tanzania-focused digger is expected to deliver a 60% earnings rise in 2017, and to follow this up with a 22% advance the following year.

Consequently Shanta deals on a mere forward P/E ratio of 3.7 times with anything below 10 times, on paper at least, generally classified as unmissable value. And the company’s PEG reading comes out at just 0.1.

It provided the market with a reassuring update in late April over the progress at its New Luika underground project, with work there continuing on time and within budget, the company advised.

Output is anticipated to fall from the 20,416 ounces of material dug during January-March in the second quarter due to the switch underground, resulting in between 80,000 ounces and 85,000 ounces of material in 2017, down from the record of 87,713 ounces set last year).

But in the long term, Shanta’s new underground operations could pave the way for stunning earnings growth with first ore pulled from the ground in recent days. Looking ahead, that growth could come as I expect) safe-haven demand for precious metals to remain strong.

The post These growth shares could be dealing below true value 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. 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.

Gold and silver producer Hochschild was recently 6% lower from Wednesday, bringing prices away from recent three-and-a-half-year peaks above 315p per share. Shanta Gold has fared more favourably, however, and was 4% higher and just off 18-month highs of 10p.

Gold star

Shanta Gold advised that pre-tax losses narrowed to $3m during January-June from $10.3m in the corresponding 2015 period. And revenues surged 75% during the first half to $55.7m thanks to higher gold values and increased production.

Total metal output rose to 48,237 ounces between January and June from 28,180 ounces a year earlier, Shanta noted, thanks to improved ore access at its Bauhinia Creek and Luika assets. And chief executive Toby Bradbury advised that “we retain our expectation of meeting the upper levels of our 2016 production guidance of 82,000-87,000 ounces.”

And in further good news, the gold digger saw cash costs collapse to $437 per ounce during the first half, down from $993 in the same period last year. This helped force net debt back below the $40 mark.

Silver surfer

The news over at Hochschild Mining was also broadly positive on Thursday, despite its shares falling.

The London-based business saw revenues shoot 78% higher during January-June from a year earlier, to $339.3m. This helped Hochschild swing to pre-tax profits of $60.3m from losses of $43.4m in the corresponding 2015 half.

Like Shanta Gold, Hochschild has benefitted from the healthy uptick in precious metals values over the past year. But the company also has to thank a much-improved operational performance to thank for this rebound.

Hochschild produced 17m attributable silver equivalent ounces between January and June, while attributable gold equivalent ounces climbed to 229,100 ounces. And with its Inmaculada and Arcata mines performing ahead of prior expectations, Hochschild has hiked its full-year output target from 32m attributable silver equivalent ounces to 34m ounces.

On top of this, the digger saw cash costs slide during the first half, prompting Hochschild to also slash its forecasts for the year — costs are now predicted to register at $11-$11.50 per silver equivalent ounce, down from a previous estimate of $12-$12.50.

So should you buy?

I consider today’s stock price decline over at Hochschild to be nothing more than mild profit-taking following sustained strength — the share has risen more than 500% since 2016 kicked off!

While the silver price remains on shakier ground than gold — a result of the metal’s wide usage in industry, and consequent correlation to the health of the global economy — I believe the shaky macroeconomic environment leaves plenty of scope for further ‘safe haven’ buying of the shiny commodities.

And with Shanta Gold and Hochschild getting a grip on slashing costs, not to mention embarking on exciting exploration and development projects, I reckon the precious metals plays could keep on rising.

The post Are these mining stocks ‘hot buys’ after today’s results? 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.

A reverse circulation drilling programme has been completed at the Askari mineralised target, which is one of the early stage targets that form Shanta’s exploration programme. The company has encountered mineralisation in 24 out of the 26 holes that were drilled as part of its first phase of drilling. Phase two of drilling at the Askari target is expected to include step-out and in-fill drilling, with the work due to be incorporated in Shanta’s wider 2016 exploration programme.

With shares in Shanta Gold having increased by 51% since the turn of the year, the company has clearly benefitted from the rising gold price during the period. Looking ahead, it would be of little surprise for the price of gold to continue its upward trajectory, since investors continue to view the asset as a store of wealth. With market uncertainty set to remain high, gold continues to offer strong defensive characteristics in an uncertain world.

Of course, Shanta Gold is a relatively high risk stock, owing partly to its small size. As such, while it may be worth a closer look for less risk averse investors, other gold producers and explorers may be preferable for most investors.

Meanwhile, shares in Sirius Minerals (LSE: SXX) have almost fully recovered from their slump at the end of January. They fell heavily on the back of news regarding a delay to the definitive feasibility study for the planned potash mine in York, the results of which will now be announced at the end of March rather than at the end of January. The reason for the delay was simply the large volume of information which it entails, as well as Sirius wishing to avoid mistakes on such a large and complex project.

Alongside the delay, Sirius also announced that it is moving towards the selection of preferred tenderers for the three initial critical path components for project implementation. They are site preparation, mine shafts and the mineral transport system. And with it this week highlighting the potential for its polyhalite fertiliser on crop growth, it could have a very bright long term future.

Clearly, such a major project is unlikely to run smoothly and on schedule throughout the whole process, so delays and disruptions are bound to be expected. However, with such appealing stocks available elsewhere in the mining sector, Sirius may be worth watching rather than buying at the present time.

Also in the news this week has been Enquest (LSE: ENQ), with the oil and gas company increasing its stake in the Kraken development by 10.5%, which brings its total interest to 70.5%. This is positive news for the company, since the Kraken development is expected to begin production in the first half of 2017 and has recently been able to reduce full cycle gross project costs by around 10%. This should improve its competitiveness in a low oil price environment.

Despite this news, Enquest continues to offer significant risks. It has a highly leveraged balance sheet which given the prospect for a fall in the price of oil, could lead to financial challenges over the medium term. And with a number of oil and gas sector rivals being highly profitable and trading on low valuations, there could be better options elsewhere.

The post Does This Week’s News From Enquest Plc, Sirius Minerals PLC And Shanta Gold Limited Make Them Star Buys? appeared first on The Motley Fool UK.

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• Will next week hand investors a once-in-a-decade chance to buy UK stocks?
• How to invest £15k in dividend shares to aim for £1,000 of passive income this year
• The biggest reason to use a SIPP is…
• 5 steps that could turn £5 a day into a £500 a month passive income
• What can we learn from Warren Buffett about investing for retirement?

Peter Stephens 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.