As such, focusing on time in the market may be a better strategy to pursue. This may provide an investor with the opportunity to benefit from gradually improving performance recorded by the company in question. With that in mind, here are two smaller companies which seem to be making encouraging progress with their strategies. Is now the right time to buy them?

Improving outlook

Reporting on Friday was European oil and gas exploration company Ascent Resources (LSE: AST). The company updated its investors on the progress towards the commencement of export production from the Petisovci asset to INA in Croatia. Following an update on 28 September, the process of recertifying the export pipeline by the Croatian government has taken longer than expected. The company now expects an exchange of signatories between INA and the Croatian authorities in a short timeframe.

Once this final step has been completed, the company will begin to export gas production. This could have a positive impact on its share price performance and help its valuation to rise even further following a 96% increase during the last year.

Clearly, the company’s share price is highly dependent upon news updates in the short run. Delays could hurt its performance and lead to a decline in investor sentiment. However, with Ascent Resources on the cusp of beginning export gas production, now could be the right time to buy it ahead of potentially improved financial performance in future years.

Profit growth

Also offering a potential investment opportunity for the long run is oil and gas exploration and development company Soco International (LSE: SIA). The company is expected to grow its pre-tax profit from £4.4m last year to over £21m in the next financial year. This could help to improve investor sentiment in the stock after what has been a challenging 2017 so far. Its valuation has fallen by 27% since the start of the year, with there being little sign of a potential turnaround.

However, with the price of oil rising this year and there being a prospect for a higher oil price in future, now could be the right time to buy Soco for the long run. Investor sentiment towards the wider oil and gas sector may be given a boost if OPEC supply cuts and higher demand cause the price of oil to rise.

The company may trade on a forward price-to-earnings (P/E) ratio of 110, but with its rapid growth prospects it could deliver impressive share price performance. As such, it appears to offer upside potential for the long run.

The post Time to get greedy with these 2 small-cap growth stocks? appeared first on The Twelfth Magpie.

More reading

• Back below 500p, is it time to consider BP shares again?
• Is there any value left in Lloyds shares now they’re over £1?
• How much would I need in a Stocks and Shares ISA to target £19,036 a year in second income?
• After huge new nuclear deals, are Rolls-Royce’s sub-£15 shares set to power higher?
• This 7.5% yielding passive income share is at a 13-year low! Time to consider buying?

Peter Stephens 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.

According to a press release on the matter published this morning, Cadogan has made a ‘highly preliminary’ merger approach, following an earlier sharp rise in Ascent’s price ahead of the Easter break. That was inspired by a press release issued before the weekend hinting at a potential merger. 

However, the terms of any merger are yet to be announced, and both news releases on the topic from the company have come attached with the standard boilerplate disclaimer: “The discussions are at an early stage and there can be no certainty that an offer will be made, nor as to the terms on which any offer might be made.”

So, at this point in time any guesses regarding a possible merger, or the price at which a potential offer for the company will be made, are purely speculative. 

Time to take profits? 

After such an aggressive rally in such a short space of time, some of Ascent’s investors will be asking themselves if it’s time to take profits and sell the company’s shares ahead of any concrete offer for the company. 

And this might be the right course of action. Indeed, merger discussions still seem to be at an early stage and there’s still a chance the deal could fall through. What’s more, Cadogan may be put off its target by the recent increase in valuation. In five days, Ascent’s market capitalisation has gone from just under £1.6m to nearly £12m, that’s a big increase in value. It may mean that the deal has now become uneconomic for Cadogan. 

Moreover, Ascent hardly has the most commendable record of growth. The company’s shares have lost 94% of their value over the past five years and the group has reported heavy losses since 2011. Also, the company has been relying on placings and crowd-funding for at least the last 12 months just to raise enough cash to keep the lights on. 

With this being the case, Ascent’s life as an independent public company may be limited. 

Top slicing

Even the world’s most experienced investors find it difficult to sell a stock at just the right moment, booking the best possible gains before they evaporate. So, to maximise gains, many experienced investors use a strategy called ‘top slicing’ whereby they sell a portion of their position after a recent rally, book those profits and leave the rest of the position open to profit from any further gains. 

It could be time for some investors to use a similar strategy with Ascent. As the company’s future is uncertain, and no concrete offer has been made, it might be wise for investors to book some of the recent gains by top slicing their positions, leaving some stock on the table if an offer does emerge. 

The post After A 700% Gain In Three Days, Is It Time To Sell Ascent Resources Plc? appeared first on The Twelfth Magpie.

More reading

• Back below 500p, is it time to consider BP shares again?
• Is there any value left in Lloyds shares now they’re over £1?
• How much would I need in a Stocks and Shares ISA to target £19,036 a year in second income?
• After huge new nuclear deals, are Rolls-Royce’s sub-£15 shares set to power higher?
• This 7.5% yielding passive income share is at a 13-year low! Time to consider buying?

Rupert Hargreaves 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.

Very buyable

Barr’s shares haven’t moved much today, and are changing hands for 520p, which is over 20% down from their 52-week high. A number of short-term challenges hurt performance in the first half of last year, while the Chancellor George Osborne’s recent announcement of a sugar levy on soft drinks hasn’t helped sentiment.

However, Barr’s full-year results are encouraging. The company maintained market share on slightly lower revenue, but with an operating margin rising to 16.3%, earnings moved 14% higher and the dividend was increased by 10%.

The UK soft drinks market remains challenging, but Barr’s acquisition of cocktail mixers business Funkin last year looks a shrewd move, as this is currently one of the few strong growth areas in the market. International expansion is also looking good, with revenue up 30% and increasingly significant relationships with partners Dr Pepper Snapple Group and Rockstar.

Barr has a strong balance sheet, giving it “the flexibility to exploit growth opportunities as they arise”, and I think the shares look very buyable at 17.5 times trailing earnings.

Changed world

Tesco’s international expansion has been reined in, the UK store footprint is being reduced, and with the company’s balance sheet still stretched, the focus is on making small incremental improvements to the business, with customers, rather than shareholders, seeing the benefit for the time being.

Meanwhile, Aldi and Lidl continue their relentless store opening programmes, Sainsbury’s is buying Argos-owner Home Retail and Morrisons has announced a deal to supply groceries to Amazon’s Prime Now and Pantry customers.

Tesco is forecast to post earnings per share of less than 5p when its announces its annual results in two weeks’ time, giving a price-to-earnings ratio of 39 at a current share price of 193p.

Clearly, a strong recovery next year is already priced in, but with operating margins in low single digits likely to be the norm in what is now a changed world for the supermarket industry, Tesco’s sustainable level of annual earnings growth in the longer term looks less promising to me than that of Barr.

Situation for speculators

Ascent Resources’ shares are flying high today — up 86% to 3.62p, as I’m writing. Today’s rise follows a more-than-doubling of the share price last Thursday when Ascent announced “a preliminary approach from Cadogan Petroleum … that may or may not lead to an offer being made for the entire issued and to be issued share capital of the Company”.

Cadogan today made its own announcement, confirming a “highly preliminary” approach, and stating, as Ascent had done, that “there can be no certainty that an offer will be made or as to the terms of any offer”.

Ascent’s flagship Petišovci tight gas project in Slovenia is a promising prospect, but it’s not plain-sailing in the current environment for indebted Ascent to progress the development to its full potential. Cash-rich Cadogan is in a stronger position.

Will Cadogan make a firm offer before the deadline date of 21 April? Will the offer be significantly higher than the current share price? If there’s no offer, will Ascent’s shares fall back below 1p? This is a situation for speculators, and as an investor whose first priority is to minimise downside risk, it is not one for me.

The post Could A.G. Barr plc Be A Better Buy Than Tesco PLC And Ascent Resources Plc? appeared first on The Twelfth Magpie.

More reading

• Here’s what a surging Tesco share price has done to £10,000 invested 5 years ago
• Are Tesco shares losing their momentum?
• Tesco’s share price drops 2% on Q1 trading miss. What’s gone wrong?
• As Tesco shares dip on Q1 results, is this a brilliant time to buy?
• How much might £19,999 in a Cash ISA be worth in 2036?

G A Chester 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.