My Foolish colleague Roland Head has described the sale as a great-tasting deal for Whitbread. I agree with him and I’ll explain shortly why I believe the stock is a bargain buy today. First, I want to tell you about another FTSE 100 company that I also rate a great-value buy.

Sunken share price

Cruise ship group Carnival (LSE: CCL), which owns the line of the same name, and a number of others, including P&O Cruises and the Cunard Line, is the biggest cruise ship operator in the world. Its shares have often looked expensive on paper. However, they’ve sunk significantly from an all-time high of 5,380p in August last year, including a 10% drop on the release of the group’s annual results yesterday afternoon. I reckon they’re now way oversold. At 3,850p, and with the company having posted record revenue and earnings, they’re as cheap as chips by historical standards.

Revenue for the financial year ended 30 November was up 7.8% to $18.9bn and adjusted earnings per share (EPS) increased 11.5% to $4.26 (335p at current exchange rates). The board hiked the dividend 21.9% to $1.95 (153.5p). At the current share price, the price-to-earnings (P/E) ratio is 11.5 and the dividend yield is 4%.

Management said cumulative advance bookings for fiscal 2019 are considerably ahead of the prior year, and that it expects adjusted EPS in the range of $4.50 to $4.80. The midpoint of $4.65 (366p) makes the forward P/E just 10.5, compared with 16 this time last year. Stock markets are jittery at the moment, and I reckon this is a great opportunity to buy a slice of a high-quality business with a strong driver for growth. As my Foolish colleague Rupert Hargreaves has discussed, demand for cruises has increased rapidly over the past few decades and looks set to continue for many years to come.

Premier investment

Whitbread’s disposal of Costa Coffee — set to complete in the first half of 2019 — will enable it to focus on its remaining business: the UK’s biggest hotel chain, Premier Inn. There was never a compelling reason for having these two businesses under the same roof, as there were few synergies, and the sale of Costa received the overwhelming support of shareholders.

I believe Premier Inn has a bright future as a standalone company. Management gave underlying EPS for the first half of the current year, with Costa excluded as a discontinued operation. The annualised figure is 236.4p, giving a P/E of 18.8 at a current share price of 4,450p. However, I believe it’s a lot cheaper than that P/E suggests, due to the huge chunk of cash to come in from the Costa Sale, and what the company has called “the significant structural growth opportunities available to Premier Inn in the UK and internationally.”

Management reckons it has a growth runway in the UK that could take its current 74,000 rooms to 100,000 and beyond. Meanwhile, the potential to repeat the success in Germany, where its current pipeline is near 6,000 rooms, makes for a compelling opportunity, in my view.

The post The Whitbread share price isn’t the only FTSE 100 bargain I’d snap up today appeared first on The Twelfth Magpie.

More reading

• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?
• Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?
• Up 95%! This FTSE 100 stock’s outperformed Nvidia over the past year
• With a 9.3% yield, is this an amazing opportunity to consider buying dirt-cheap Taylor Wimpey shares?
• How much do you need in a Stocks and Shares ISA to aim for £375 a week in retirement?

G A Chester has no position in any of the shares mentioned. The Motley Fool UK has recommended Carnival. 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.

The company released its Q1 results today and the shares are up 2.7% to near the 4,000p level at which they started the year. Let’s have a look at the results before returning to that 5,200p valuation.

In-line with expectations

On the face of it, some of today’s numbers were disappointing. Costa’s like-for-like sales were down 2% and Premier’s were down 0.9%, giving the group an overall decline of 1.9% in like-for-like sales. However, this was no worse than analysts were expecting, reflecting well-known recent trends in the UK hotels market and retail footfall weakness in traditional shopping locations.

More positively, Costa’s total sales growth was 4.9%, due to a strong contribution from new stores and Express machines, and Premier’s was 2.2%, driven by additional capacity. Overall sales growth was 3.2%. The company reported good progress on its £250m efficiency savings and chief executive Alison Brittain said: “We expect to deliver in line with expectations for the full year.”

Consensus forecasts

City analysts expect Whitbread to deliver a £610m pre-tax profit on revenue of £3.5bn for its financial year to February 2019. The consensus forecast for earnings per share (EPS) is a 2.3% rise to 266p, while the dividend is expected to be increased 4% to 105p.

At the current share price, the forward price-to-earnings (P/E) ratio is 15 and the prospective dividend yield is 2.6%. The P/E doesn’t appear to offer great value given the low-single-digit EPS growth, while there are plenty of far higher dividend yields available among the company’s FTSE 100 peers. So what’s that potential 30% upside to 5,200p I mentioned earlier all about?

Demerger of Costa

Many analysts have been saying for years that there are no synergies from keeping Premier and Costa together and that the two management teams should thrive as separate entities.

There are no synergies from keeping the businesses together and the two management teams should thrive as separate entities. Whitbread finally succumbed to pressure from activist investors. It announced in April that it is “committed to a demerger of Costa, … expected to be completed within 24 months.” The company said today that good progress is being made on the core infrastructure and efficiency work in preparation for the demerger.

A win either way?

Analysts at Canaccord said in April:“We remain buyers with a 4,500p target price. Our analysis suggests a potential break-up price of 5,200p.” I’d go along with that valuation. Furthermore, there’s a fair chance value could be outed sooner rather than later by a bid for Costa before the demerger.

However, I rate Whitbread stock a ‘buy’ not only because of the value-outing potential of a disposal of Costa, but also because of the medium-term prospects of Costa and Premier, if we get to a demerger. In the case of the former, I see great potential in Costa China and Costa Express and, in the case of the latter, in the rollout of Premier Inn Germany.

The post Could FTSE 100 stock Whitbread rise to 5,200p? appeared first on The Twelfth Magpie.

More reading

• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?
• Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?
• Up 95%! This FTSE 100 stock’s outperformed Nvidia over the past year
• With a 9.3% yield, is this an amazing opportunity to consider buying dirt-cheap Taylor Wimpey shares?
• How much do you need in a Stocks and Shares ISA to aim for £375 a week in retirement?

G A Chester has no position in any of the 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.

Look, I’m not going to pretend that the foodie’s full-year financials didn’t throw up some serious cause for concern. Like-for-like sales at Domino’s grew just 1.5% during the first nine weeks of 2016, the company advised, an eye-watering reduction from the 7.5% advance enjoyed during the whole of 2016.

While the structural market for the takeaway sector remains strong, Domino’s has suffered more recently as competition from the likes of Pizza Hut has heated up. But I believe the step back from record sales growth should not prompt investors to panic as the company’s multinational expansion strategy still offers a tremendous amount of upside.

Domino’s famously hiked its UK store target in November to 1,600 sites from its prior target of 1,200, and the company plans to have 80 of these outlets up and running by the close of the year.

And the pizza powerhouse also sees huge potential overseas. Not only does the company plan to boost the number of stores it operates in Europe by around 300% (to 400 outlets), but Domino’s also remains busy on the acquisition front to boost overseas sales, the company more recently buying out Norwegian rival Dolly Dimple’s in March for £4m.

Piping hot

The City certainly expects Domino’s Pizza to keep on delivering the goods, and while some analysts have cut their estimates following March’s update, the business is still anticipated to keep on grinding out delicious earnings growth for some time yet.

Indeed, the number crunchers expect Domino’s to report bottom-line expansion of 11% in both 2017 and 2018. And I reckon the prospect of delicious, double-digit earnings growth further out merits a slightly-toppy forward P/E ratio of 20.8 times.

The business of catching so-called falling knives is always tricky, needless to say. But I strongly believe Domino’s could be on the cusp of a fresh move higher as the fruits of huge expansion, allied with the impact of massive investment in the fast-growth digital channel, becomes clear.

Take a sip

Like Domino’s, I reckon the vast amounts Whitbread (LSE: WTB) is throwing into spreading its international wingspan should also deliver exceptional profits growth in the coming years.

Whitbread saw group sales chug 8.2% higher in the 12 months to February 2017, to £3.1bn, with sales at Costa Coffee rising 10.7% as the installation of new stores across the globe (not to mention its highly-popular ‘Costa Express’ machines) paid off. And the 3,816 gross new UK rooms at Premier Inn helped push sales here 9% higher from a year earlier.

Solid demand for Whitbread’s cut-price beds and premium coffee has seen earnings bound relentlessly higher in recent years, and the City expects this trend to continue with expansion of 4% in fiscal 2018 and 8% the following year.

And while a prospective P/E ratio of 16.6 times is great value given Whitbread’s exciting growth plans, in my opinion, I reckon this could lay the foundation for a significant share price re-rating.

The post 2 growth goliaths I’d buy before it’s too late appeared first on The Twelfth Magpie.

More reading

• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?
• Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?
• Up 95%! This FTSE 100 stock’s outperformed Nvidia over the past year
• With a 9.3% yield, is this an amazing opportunity to consider buying dirt-cheap Taylor Wimpey shares?
• How much do you need in a Stocks and Shares ISA to aim for £375 a week in retirement?

Royston Wild has no position in any shares mentioned. The Motley Fool UK has recommended Domino's Pizza. 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.

Cause for celebration

And Card Factory saw sales growth tick higher during the crunch Christmas period, a factor that helped “cumulative like-for-likes for the fourth quarter of the financial year [return] to the historic range of 1% to 3%.”

As a result Card Factory said that it expects underlying pre-tax profit for the full year to beat analysts’ expectations of between £80.9m and £83m. The market responded to Card Factory’s positive statement by sending its stock value 3% higher from Wednesday’s close. But I believe the retailer offers plenty more bang for stock pickers’ buck at current prices.

Card Factory is anticipated to bounce from a 1% earnings decline in the year to January 2017 with a 2% rise in fiscal 2018. This results in a P/E ratio of 12.9 times, some way below the London blue-chip average of 15 times. Meanwhile, a projected dividend of 9.1p per share creates a chunky 3.7% dividend yield.

With Card Factory planning to open around 50 stores each year, and rising inflation set to erode consumers’ spending power, I expect sales at Card Factory to keep shooting higher.

Smell the coffee

Beverages and beds specialist Whitbread (LSE: WTB) also furnished the market with fresh financials during Thursday trading.

But a combination of patchy results for its Premier Inn division and mild profit-taking — Whitbread’s share price hit four-and-a-half-month highs last Friday — saw the stock last dealing 5% lower on the day.

Whitbread announced that total sales at its hotel arm rose 9.2% during the 13 weeks to December 1, while like-for-like total revenues increasing 1.8% higher from a year earlier. The impact of hotel expansion at Premier Inn, however, saw revenues per available room (or REVPAR) slip 1.3% in the period.

In sunnier news, Whitbread’s release underlined the improving popularity of Costa Coffee. Total sales at the unit soared 12.5% during the quarter — a result that was attributed to the success of recent marketing campaigns — and on an underlying basis revenues climbed 4.3%.

And Whitbread is embarking on aggressive expansion to keep sales rising across the business. The company has a pipeline of some 14,000 new Premier Inn rooms in the UK alone. And expansion at Costa Coffee will see between 230 and 250 net new shops, and at least 1,500 Costa Express machines, unveiled worldwide.

The City certainly expects Whitbread’s long-running growth story to continue, and anticipates a 1% bottom-line rise in the period to February 2017, to be followed by a 6% advance in fiscal 2018.

I reckon a consequent P/E ratio of 15.2 times for next year is great value, given Whitbread’s exciting growth strategy and roaring success with consumers across the globe.

The post 2 FTSE 350 stars to consider buying before it’s too late! appeared first on The Twelfth Magpie.

More reading

• Want to retire early? Here’s how a weak stock market could actually help

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.

Build a fortune

I’m convinced the underlying strength of the British housing market makes Redrow (LSE: RDW) one of the strongest growth picks out there.

While the explosive property price growth of previous years looks set to end in 2017 as homebuyer appetite cools, the huge gulf between housing supply and demand means that house prices are unlikely to fall off a cliff any time soon.

Nationwide chief economist Robert Gardner commented this week that, despite fears over the impact of Brexit on the wider economy, “demand conditions have strengthened a little in recent months, reflecting the impact of solid labour market conditions and historically low borrowing costs.”

And despite concerns over the health London property market, Redrow is managing to overcome the worst of these troubles thanks to its limited exposure to high prices in the capital. Private reservations at the firm rose 6% during the 19 weeks to November 4, and the order book advanced 29% year-on-year to £941m, easing fears of a sharp demand slump.

And Redrow is expected to fare better than many of its rivals in the near term with modest earnings dips widely predicted across the sector. By comparison Redrow is predicted to punch a 3% earnings rise in the period to June 2017.

This forecast leaves Redrow dealing on a P/E ratio of 7.2 times, some way below the FTSE 100 forward average of 15 times. I reckon any risks to the construction specialist’s earnings outlook is more than priced in at these levels.

Take a sip

Coffee house and hotel giant Whitbread (LSE: WTB) has seen its share price tank again in recent months, a 20% fall since the start of September taking it to within a whisker of fresh multi-year lows just this week.

This weakness reflects to a large degree fears over the profitability of leisure stocks like Whitbread as Brexit-related turbulence hits the economy from next year and beyond. However, I believe the business has what it takes to navigate these waters by grabbing market share, and reckon now is a great time for value hunters to nip in.

The Premier Inn owner is well on track to meet its goal of 85,000 rooms by 2020, and it sees the potential for 100,000 of its low-price rooms in Britain beyond that. And Whitbread also has big plans for its Costa Coffee franchise, the company targeting 2,500 UK outlets by the close of the decade and 3,000 further out.

And Whitbread has eyed expansion in Germany and China for Premier Inn and Costa Coffee respectively to spearhead its international growth plan, steps that will also reduce the impact of a possible downturn in the domestic economy.

The number crunchers certainly expect earnings to keep rolling higher at Whitbread, and a predicted 1% bottom-line rise for the period to February 2017 is anticipated to speed to 6% in the following period.

These projections create very-decent P/E ratios of 14.1 times for this year and 13.3 times for fiscal 2018. I reckon this is a bargain for a firm with Whitbread’s electric growth potential.

The post 2 shockingly cheap growth shares appeared first on The Twelfth Magpie.

More reading

• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?
• Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?
• Up 95%! This FTSE 100 stock’s outperformed Nvidia over the past year
• With a 9.3% yield, is this an amazing opportunity to consider buying dirt-cheap Taylor Wimpey shares?
• How much do you need in a Stocks and Shares ISA to aim for £375 a week in retirement?

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

InterContinental reported that sales growth had slowed during July-September, the company reporting a 1.3% rise in revenues per available room. This is down from the 2% advance recorded for the first half.

The hotel operator saw sales in its Asia, Middle East & Africa division dip 0.1% during the three-month period, while revenues in Europe flatlined in Q3. But InterContinental continued to perform well in the Americas and Greater China, and sales here rose 1.9% and 0.9% respectively.

This led the Footsie hotelier to advise that “despite the uncertain environment in some markets, we remain confident in the outlook for the remainder of the year.”

The City certainly doesn’t appear to be too concerned by InterContinental’s earnings outlook either, certainly not in the immediate term. Indeed, the beds behemoth is anticipated to enjoy a modest earnings uptick in 2016, before punching a splendid 17% advance in 2017.

These figures create P/E ratings of 22.1 times and 19 times respectively, for Intercontinental, sailing well above the FTSE 100 average of 15 times.

And value hunters will no doubt be put off by the firm’s dividend yields of 2.2% for 2016 and 2.4% for next year, which fall some way short of the big-cap average of 3.5%.

However, I believe InterContinental’s ambitious expansion strategy — a scheme that saw it open 51 new hotels during the last quarter alone — and its bold plans for growth markets like China still make it an attractive stock candidate for long-term investors.

Beverages beauty

Unlike InterContinental, whose vast international presence has helped keep its share price bubbling around August’s record peaks, fellow leisure play Whitbread (LSE: WTB) has seen its value trickle lower again as investors’ Brexit fears have gained momentum.

However, I believe this insipid market appetite makes the Premier Inn and Costa Coffee owner a great pick for contrarian investors.

Whitbread is expected to punch more modest earnings increases of 2% and 7% in the periods to February 2017 and 2018 respectively. Yet these numbers result in very-reasonable P/E ratios of 15.6 times and 14.6 times.

Dividend yields of 2.5% and 2.7% may also lag the big-cap average, but I reckon Whitbread should provide tasty returns in the years ahead.

While demand for its British hotel beds has softened more recently, I expect this to pick up again as the firm’s expansion drive continues and the weakness of sterling draws holidaymakers from abroad. And Whitbread may also benefit from sleepy travellers ‘trading down’ from more expensive accommodation providers.

On top of this, demand for Costa Coffee’s beverages continues to gain traction too, prompting Whitbread to create between 230 and 250 new outlets across the globe this year alone.

I believe both InterContinental and Whitbread remain solid picks for growth hunters.

The post Which of these FTSE 100 leisure stocks should you buy after today’s news? appeared first on The Twelfth Magpie.

More reading

• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?
• Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?
• Up 95%! This FTSE 100 stock’s outperformed Nvidia over the past year
• With a 9.3% yield, is this an amazing opportunity to consider buying dirt-cheap Taylor Wimpey shares?
• How much do you need in a Stocks and Shares ISA to aim for £375 a week in retirement?

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.

The run-up to the referendum caused shares to weaken at the beginning of 2016 too, so there’s a decent chance we can find good value among shares that still languish now.

Nothing much has changed

In recent days, we’ve seen a rebounding stock market in general, perhaps due to falling sterling making those firms with earnings in other currencies, such as the euro and the US dollar, more attractive. The resurgent stock market could also be down to investors realising that the Brexit process will likely be a drawn-out affair. As such, the level of uncertainty has diminished because nothing much seems set to change economically for some time — Britain will still trade with Europe on its existing terms for a good while yet.

Shares representing firms with UK-focused earnings are down the most, such as hospitality company Whitbread (LSE: WTB) and construction and landscaping materials supplier Marshalls (LSE: MSLH), perhaps on fears that the Brexit process may cause a UK economic slowdown. Yet a Brexit-induced slowdown, if it arrives, may not be as severe as feared by some because it’s in the interests of all the countries of Europe to make Britain’s transition to a non-European Union country as smooth as possible.

Meanwhile, drugs firm Shire (LSE: SHP) looks interesting because its shares remain below previous highs despite the company’s large overseas earnings. The firm reports in US dollars, which are worth more when converted to sterling when the pound is weak against the dollar. Theoretically, the firm’s share price should go up on the London market to reflect that currency advantage.

Better value?

The big share price markdowns suffered by Whitbread and Marshalls could mean that value has increased for shareholders buying now. City analysts following the firms still predict robust growth in earnings. They see Whitbread’s earnings rising 3% for the year to February 2017 and 10% to February 2018, and Marshall’s scoring an uplift of 23% this year and 18% during 2018.

There’s a lot of cyclicality in the operations of both but they continue to trade well. Whitbread’s Costa Coffee brand, which is growing fast,  has defensive characteristics that could help mitigate some of the effects of any slowdown that arrives — people will be reluctant to give up their daily caffeine fix whatever the economic weather.

Right now seems like a good time to run a slide rule over these three quality outfits. At a share price of  3,458p, Whitbread trades with a forward price-to-earnings (P/E) ratio of just under 13 for year to February 2018, Shire’s P/E ratio is just over 13 for 2017, and Marshall’s sits at just under 12 for 2017. All these valuations have been higher in the recent past.

The general economic outlook is uncertain due to the unknowns surrounding the Brexit process, but uncertainty is what drives share prices lower. If good trading continues, today’s share prices could represent good vale for Whitbread, Shire and Marshalls.

The post Whitbread plc, Shire plc and Marshalls plc beg your attention following the referendum sell-off appeared first on The Twelfth Magpie.

More reading

• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?
• Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?
• Up 95%! This FTSE 100 stock’s outperformed Nvidia over the past year
• With a 9.3% yield, is this an amazing opportunity to consider buying dirt-cheap Taylor Wimpey shares?
• How much do you need in a Stocks and Shares ISA to aim for £375 a week in retirement?

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

The post Why earnings are expected to explode at AstraZeneca plc, Whitbread plc and Photo-Me International plc! appeared first on The Twelfth Magpie.

More reading

• Down 14% to below £135, here’s where AstraZeneca’s deeply undervalued share price ‘should’ be trading today
• The top 3 FTSE shares for beginner investors to consider buying in 2026
• 2 FTSE shares for beginners starting an ISA
• 3 UK shares to consider holding in a Stocks and Shares ISA for a decade

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

The share price doesn’t lie

A case in point is Asos (LSE: ASC), one of the three fashion retailers under review today. While some may argue that the smart money has already been made in this share, the point of this article is to assess whether there’s still more to go.

Indeed, turning to the six-month chart below, we can see that it highlights a rather interesting pattern emerging with both online specialists Asos and Boohoo.com (LSE: BOO) that are well ahead of the FTSE 100. Meanwhile sector peer Next (LSE: NXT) has seen its share price decline substantially as the company faced a perfect storm of increased online competition across the sector, one of the warmest winters on record and some issues in stock availability at key times.

The final nail in the downtrend coffin came when the preliminary results for January 2016 were announced last month with CEO Lord Wolfson commenting on the outlook. He said: “The year ahead may well be the toughest we have faced since 2008.  We are very clear on our priorities going forward and whatever challenges we may face, it is important that we remain focused on ensuring that the company’s product, marketing, services and cost controls all improve in the year ahead”.

Since those comments, the share price has slumped further and given that the Great British weather is currently being unpredictable to say the least, I’ll be looking forward to the first quarter’s trading statement next week with interest – as will the rest of the market.

Just the weather or something more disruptive?

The weather obviously hasn’t helped retailers like Next and this is supported to a degree when others in the sector are feeling the pain, such as Costa Coffee owner Whitbread. It recently highlighted weaker than expected LFL sales growth of 0.5% due to the warmer weather and reduced footfall on the high street.

And just this week we’ve seen high street retailers BHS and Austin Reed enter administration, placing over 11,000 jobs at risk.

Yet UK sales at both Asos and Boohoo.com have continued to grow, up by 25% and 38%, respectively.

It strikes me, therefore that despite the impact of the weather, sales have continued to grow at a pretty healthy clip at the online-only retailers. This leaves me wondering whether it was simply a bad year for Next and similar businesses like Debenhams that reported similar single-digit sales growth recently, or a fundamental change in the way that we consumers are choosing to transact.

As things stand, it’s still unclear to me whether there’s a seismic shift underway or whether Next has simply suffered a hiccup, not helped by the unseasonal weather. Next is a past master at bouncing back from downturns. However, this possible shift is definitely a theme that I’ll be keeping a close eye on going forward.

The post Will fashion disruptors Asos plc and Boohoo.com plc leave Next plc for dead? appeared first on The Twelfth Magpie.

More reading

• Prediction: by 2027, this battered FTSE AIM stock could turn £3,000 into…

Dave Sullivan has no position in any shares mentioned. The Motley Fool UK owns shares of and has recommended ASOS. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

If you’re looking for last minute ideas or want to plan for your 2016/17 allowance, let me throw three serious contenders for my own portfolio into the pot for you to chew over.

Down but not out

Iconic brand owner Rolls-Royce (LSE: RR) is trading through a troublesome patch. Earnings were flat during 2014, down 10% in 2015 and look set to tumble almost 60% this year. The share price followed events and, at today’s 691p, sits almost 50% below the peak it achieved at the start of 2014. With the recent full-year results, came news that the directors trimmed the dividend. Ouch! That’s not the dependable performance we tend to expect from one of Britain’s greatest companies.

The Aerospace and Marine engine manufacture’s chief executive expects 2016 to be difficult as the firm “start(s) to transition products and sustain investment in Civil Aerospace and tackle weak offshore markets in Marine.”

Rolls-Royce is something of a recovery play, with the company insisting that the long-term outlook is good. The firm points to a healthy and growing order book, and to its restructuring program, as evidence that a simplified operating structure has potential to deliver decent profit growth down the road.

Judging by the firm’s forward price-to-earnings (P/E) ratio of around 27 for 2016, investors are ‘buying’ the story here. I’m a little more cautious. Rolls-Royce operates in an industry with a fair amount of cyclicality, and it carries chunky pension obligations.

A growth story within

Ex-brewer and pub operator Whitbread (LSE: WTB), which now specialises in hospitality, has a gem within its operations in the form of Britain’s well-loved coffee brand Costa. The growth of the brand continues to be impressive with the firm updating the market at the beginning of March to reveal a 50-week performance of 10.5% total sales growth and like-for-like sales growth of 0.5%, despite lower caffeine-seeking footfall on the high street due to an unusually warm winter. 

Costa keeps me interested in Whitbread. The firm’s other operations, such as Premier Inn and various restaurant brands, are more cyclical, but there is a strong commitment to continue to grow them, too.

At 3,971p, the firm’s shares are off around 27% from the heights achieved last year, although operationally, Whitbread is still firing on all cylinders. The valuation seems more attractive than it has been for a while with a forward P/E rating of just under 16 for year to February 2017.

Accelerating growth

Tasty (LSE: TAST) released its full-year results today, confirming that the firm’s restaurant business is a rollout that’s rolling. Revenues are up 20% for the year, adjusted operating profit up 28% and profit before tax up 20%.

The most encouraging news is that the speed of growth is accelerating. 2015 saw the firm open 13 new locations taking the estate of Wildwood and DimT branded restaurants to 48 by trading year-end, a 37% uplift over 2014.  Two more restaurants opened already since the end of December, and Tasty is targeting 15 new sites altogether for 2016. Just a couple of years ago, we measured annual expansion of new sites in single digits.

One of the great strengths of an investment in Tasty is the firm’s experienced management team. The directors are not cutting their teeth on this rollout — they’ve done it all before, and very successfully.

At today’s 163p share price, Tasty’s historic P/E rating for 2015 is 35, but if growth continues to accelerate, profitably, forward multiples will drop down fast too. That’s why Tasty is my preferred choice for an ISA top-up, followed by Whitbread and then, cautiously, Rolls-Royce Holdings.

The post Should I Put Rolls-Royce Holdings PLC, Whitbread plc Or Tasty Plc In My ISA? appeared first on The Twelfth Magpie.

More reading

• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?
• Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?
• Up 95%! This FTSE 100 stock’s outperformed Nvidia over the past year
• With a 9.3% yield, is this an amazing opportunity to consider buying dirt-cheap Taylor Wimpey shares?
• How much do you need in a Stocks and Shares ISA to aim for £375 a week in retirement?

Kevin Godbold owns shares in Tasty plc. 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.