Finsbury Food

Bakery manufacturer Finsbury Food (LSE: FIF) is first up. The company produces a range of cakes, bread and snacks. Its share price has been in fine form over the last year, rising 54%. Based on its most recent trading update, I’m inclined to think this might continue. 

Back in July, FIF announced that revenues in the second half of its financial year had climbed 9.1%. That’s despite its foodservice division still being impacted by Covid restrictions. Trading overseas was also markedly better. Revenues here jumped 27.4%, due in part to lockdowns in Europe beginning earlier.

All told, Finsbury believes recent improvements in trading will allow it to eventually report revenues of £313.3m for the full year to 26 June. That’s higher than analysts were expecting. It also brings sales back to pretty much where they were before the pandemic took hold.  

Factor in this news with a valuation of just 10 times earnings and I suspect the shares could rise above £1 soon. That said, rising cases of the Delta variant could still prove problematic. So, while I would be comfortable buying today, I also don’t see this as a risk-free investment.

Sureserve

Shares in energy support services firm Sureserve (LSE: SUR) could also reach £1+ soon, I believe. Involved in the construction and maintenance of services to homes, schools and commercial buildings, its valuation has more than doubled in 12 months. 

I expect more to come, especially after the announcement today that two of its subsidiaries have extended their contract with affordable housing care provider The Guinness Partnership. This is for a minimum of five years and could actually last for a decade. Assuming the latter, SUR has estimated this agreement will bring £140m in sales revenue.  

Like Finsbury, shares in Sureserve look a good deal at 14 times forecast earnings. One thing worth noting, however, is the ‘free float’. The fact that only 68% of the company’s stock is trading on the market could make for a rollercoaster ride. It might only take a bit of buying or selling to make the share price move violently. 

Again, I see this as a cautious buy for my portfolio.

Record

A final company whose time as a penny stock may be up shortly is currency manager Record (LSE: REC). Its share price has soared 160% over the last year to almost 91p a pop.

I think REC can gain another 10% or so in 2021. In July, the company announced that its new financial year had “started well“. Assets under management equivalents rose by 5% in Q1, supported by more net inflows and a new fund launch. 

However, REC has a smaller free float than even Sureserve (just 30%). Again, this could be beneficial if the company does all the right things. However, the opposite is also possible. While not exactly overpriced, REC’s valuation is also higher than the other penny stocks mentioned at 18 times earnings.

Notwithstanding these points, I’d still buy. The company’s balance sheet looks solid and returns on capital have been consistently excellent. Both are qualities I look for. 

The post 3 penny stocks I think could soon trade for over a pound appeared first on The Twelfth Magpie.

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Paul Summers 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.

The share rally’s biggest risers seem to have been the companies the suffered the heaviest falls since the pandemic began in earnest, back in March. This includes the travel, hospitality and leisure industries, along with the banking sector. In some cases, share prices have now more than doubled from their spring lows.

One result of this stock market rally is that there are now considerably fewer attractive investment opportunities available. Where previously, share prices looked oversold and cheap, many now look more fairly valued. However, I think there are still noticeable areas of the market where value does exist to help me build a portfolio poised for growth.

In my opinion, some of the most attractive investment opportunities right now are the shares that didn’t sell off wildly during the depths of the pandemic. Likewise, they are the shares that didn’t get swept up in the recent rally. Instead, I believe they are the companies that looked cheap before the pandemic and remained so during it.

Overlooked by the stock market rally

I’m talking about the likes of Yellow Cake. The uranium investment company that is valued at a 23% discount to its net assets. This savvy company has spent the last few months selling its uranium holdings to fund a buy-back of its own shares. That way it gains exposure to the uranium price at hefty discount. Yellow Cake looks even more attractive to me after the announcement that Rolls-Royce plans to build up to 16 small modular reactors (mini-nuclear plants) in the UK. This looks set to revitalise the nuclear sector in both the UK and beyond.

Ferrexpo is another share that I like. As well as coming with an 8% dividend, it’s also cheap, trading at just three times last year’s earnings. I’m actually surprised the shares have not been caught up in the stock market rally, since demand for its iron pellets should benefit significantly from a vaccine-enabled return to worldwide economic growth.

Vaccine improves investment prospects

Shares in Finsbury Food Group are also still looking good value to me. The shares are valued at eight times pre-Covid (FY 2019) earnings. A return to normality would surely put the bread and cake manufacturer back on its growth trajectory. Meanwhile, I think both Aviva and Tesco look attractive. Aviva is trading at a 33% discount to its net asset value. Speculation of asset disposals only reinforces the value on offer. Owing to its own disposals, Tesco appears to be on the verge of announcing a huge 20% special dividend payment.

Despite the pandemic, all of these companies are currently performing well. In fact, I think that’s precisely why they missed out on the stock market rally. Investors were attracted to the companies that had been struggling the most, the ones that really needed some positive vaccine news. I believe we now have a situation where the companies that have actually been managing well are now looking under bought and very attractive. They are the shares that I would buy now.

The post Stock market rally: 5 shares that still look cheap to me appeared first on The Twelfth Magpie.

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Thomas owns shares in Finsbury Food Group and Aviva. The Motley Fool UK has recommended Tesco. 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.

Here at the Motley Fool, our abiding philosophy is to invest for the long term. Instead of worrying endlessly about external uncertainties over which we have no control, we suggest investors focus on finding strong businesses, trading at attractive valuations. We believe this combination of qualities is likely to lead to handsome long-term returns.

I believe FTSE 100 supermarket giant Tesco (LSE: TSCO) fits the bill right now. And I’ve also been looking at a small-cap company, Finsbury Food Group (LSE: FIF), which released its half-year results today. This speciality baker manufactures cake, bread and morning goods for the retail and foodservice channels, and counts Tesco among its customers.

Playing out as planned

Tesco was a mess when Dave Lewis took over as chief executive in September 2014. The former Unilever man said there’d be no quick fix, but promised his strategy would lead to long-term sustainable growth. The group has now delivered 12 consecutive quarters of like-for-like growth in its core UK business, and the turnaround is very much playing out as planned.

Furthermore, while Sainsbury’s plan for a mega-merger with Asda has fallen foul of the Competition and Markets Authority, Tesco’s acquisition of Booker is looking a shrewd move. Indeed, I believe the growth opportunities of the combination could be more substantial than some analysts have pencilled in.

However, even as City consensus forecasts stand, a share price of 222p looks generous for the growth on offer. The forward 12-month price-to-earnings (P/E) ratio is 13.1 on a forecast increase in earnings per share (EPS) of 21%. This gives a price-to-earnings growth (PEG) ratio of 0.62, which suggests the stock offers very good value.

With a prospective 3.3% dividend yield also on offer, I’d be happy to buy into the unfolding growth and income story at Britain’s biggest supermarket group.

Now a lot cheaper

Most of the various revenue and underlying profit numbers in today’s half-year results from Finsbury Food were between up-a-bit and down-a-bit. Management described the performance as “robust” in “a challenging market.” The latter included “continued increased commodity prices alongside wider macro pressures.”

On the outlook, the company said: “Whilst there is no doubt that the wider market pressures will continue in the period ahead, our market position is solid and we are well positioned both now and for the longer term.”

The situation was much the same when I wrote about Finsbury this time last year. I described it as a decent, well-managed business, but felt that a share price of 116p, a forward P/E of 11.6 and prospective dividend yield of 2.8% weren’t sufficiently attractive for a company having to work hard to more or less stand still.

However, the share price is now down to 80.5p, the forward P/E is down to 7.6 and the dividend yield is up to 4.5%. I’m inclined to rate the stock a ‘buy’ today, with the dividend providing decent compensation, while awaiting a potential strong rise in the share price when cost inflation and those “wider macro issues” ease.

The post Forget Brexit! I’d buy the Tesco share price right now appeared first on The Twelfth Magpie.

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G A Chester has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended Unilever. The Motley Fool UK has recommended Tesco. 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.

Big in celebration cakes

A big part of the business involves making cakes under major licence agreements for big brands such as Disney, Thorntons, Mary Berry, Mars, Baileys, Weight Watchers, and others. The company’s major licensed brand business extends further with other licences aimed at growing the firm’s share of the celebration cake market in Britain, involving names such as The Simpsons, Peppa Pig, Hello Kitty, Me To You, and the Minions, as well as other “trend-led” brands. Finsbury claims to be the largest supplier of celebration cakes “to the UK’s multiple grocers.”

As well as cakes, the firm supplies artisan, healthy lifestyle and organic breads, rolls, muffins and morning pastries sold under brands such as Vogel’s, Cranks Organic, and The Village Bakery. Such names enjoy niche positions in the premium bread market, according to the firm.

Finsbury has just completed the acquisition of free-from baker Ultrapharm, which marks a move aimed at expanding into that high growth area. Meanwhile, today’s full-year results are steady, with like-for-like revenue 2.4% higher than the previous year, adjusted basic earnings per share 4.1% higher, and net earnings down 10.5% at £15.6m. The directors expressed their confidence in the outlook by pushing up the total dividend for the year by 10%.

Navigating the inflationary environment

During the year, the company struggled with what it describes as “an unprecedented inflationary environment” and had to close a loss-making bakery in London after the rising cost of butter rendered the operation uneconomic. Nipping and tucking like that strikes me as a healthy way to manage the business, rather than clinging on to a losing situation in the hope things will get better. In other areas, the company is thriving. For example, it has doubled sales of artisan bread after investing in the area during 2016.

Although demand in the firm’s food markets can be steady, I reckon the industry is competitive, which tends to leads to thin profit margins. That’s why it’s important for the firm to remain responsive to changing market conditions. Chief executive John Duffy said in today’s report that the firm’s ongoing capital investment programme and “relentless efficiency focus of recent years” has enabled it to cope with the challenging market environment and to maintain its profit margin.

The outlook is positive with the directors expecting steady organic growth. I reckon the company has demonstrated its ability to survive and thrive in its cutthroat markets. The stock is therefore well worth your research time now.

The post Why I think there’s a lot more to come for investors from this super stock appeared first on The Twelfth Magpie.

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Kevin Godbold 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.

However, the reality is that there are a number of cheap stocks available right now. Housebuilder Barratt (LSE: BDEV) is one such company, with its growth potential apparently not being fully factored into its valuation. And with another smaller growth stock reporting positive results on Monday, there could be opportunities for investors to outperform the FTSE 100.

Low valuation

In the last five years, Barratt has delivered positive earnings growth in every year. It has been able to improve the quality of its balance sheet, pay increasing dividends and develop a large land bank which should provide growth for many years to come. However, investors continue to view the stock negatively, with it having a price-to-earnings (P/E) ratio of around 9 at the present time.

The reason for this could be a general slowdown in the UK housing market. House prices have come under pressure in recent months in various parts of the UK. However, the fact is that housebuilders are not being severely affected so far. Demand for new homes is being buoyed by low interest rates and the Help to Buy scheme – both of which are expected to remain in place over the medium term.

As such, with Barratt due to report a 5% rise in earnings in the current financial year, it could offer a wide margin of safety. Although its shares could experience a period of uncertainty during the Brexit process, they are dirt cheap and may deliver far stronger performance than the FTSE 100.

Growth at a reasonable price

Also offering a relatively low valuation is bakery manufacturer Finsbury Food (LSE: FIF). The company reported a trading update on Monday for the year to 30 June 2018 which showed that sales revenue moved 2.4% higher on a like-for-like (LFL) basis. It stood at £290.2m for the full year, with profits set to be in line with market expectations.

This was a strong performance in what has been a tough environment. Inflationary pressure has remained high, but the company’s investment in prior periods has helped it to offset this to some degree. It anticipates that the UK economic environment will remain challenging. However, with a robust balance sheet and further efficiencies set to be made, it seems to be in a strong position to deliver growth.

Looking ahead to the current financial year, Finsbury Food is forecast to post a rise in earnings of 9%. With its shares trading on a price-to-earnings growth (PEG) ratio of 1.3, it seems to offer good value for money. As such, now could be the perfect time to buy them for the long term.

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Peter Stephens owns shares of Barratt Developments. 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.

Finsbury Food (LSE: FIF), which released its latest half-year results today, is another stock I have tagged as a ‘sell’. This speciality baker has been a considerably more solid performer than Interserve and there’s a different reason for my negative view on its buoyant shares.

One big problem

After a string of operational problems, poor trading and boardroom changes during 2017, Interserve issued better news in January. It said it expected operating profit in 2018 to be “ahead of current market expectations,” with new management confident it has identified initiatives that will “contribute at least £40m-£50m to group operating profit by 2020.”

For 2018, City analysts are forecasting a bottom-line profit of £48m, so with a market cap of £124m at the current share price, Interserve’s forward price-to-earnings (P/E) ratio is an incredibly low 2.6. However, I don’t believe this is the bargain it appears, due to the company’s massive net debt of over £500m.

I’m not quite as pessimistic as my Foolish friend Alan Oscroft, who has argued Interserve could go the way of Carillion, leaving shareholders with nothing, but I do think the shares could fall considerably lower than their current level. The Telegraph reported earlier this month that since the start of the year, private equity outfit Emerald Investment Partners has been quietly buying up Interserve’s debt from the likes of Lloyds and Barclays “for as little as 50p in the pound” and “may now own as much as a third of [the] loans.”

When debt is changing hands at such a discount, it’s generally bad news for existing equity. Emerald clearly sees a viable business but I believe a refinancing of Interserve, including a debt-for-equity swap, would likely come at a heavy cost to current shareholders.

Multiple headwinds

Finsbury Food has no such problems with debt. At a share price of 116p (unchanged on the day), its market cap is £151m, while net debt stands at just £16.6m. In addition to its strong balance sheet, the company is trading pretty well, with today’s results showing low single-digit top-line growth and mid single-digit bottom-line growth.

For Finsbury’s full financial year to 30 June, City analysts are forecasting a net profit in the £30m region, giving a P/E of 11.6. And there’s a dividend yield of 2.8% on a forecast payout of £4.3m.

The company acknowledges it faces Brexit uncertainties and a number of continuing challenges, including increased commodity prices and the annual above-inflation increase in the National Living wage. While management is working hard to “mitigate” the headwinds and believes it has a “resilient” business, I don’t see a P/E of 11.6 and dividend yield of 2.8% as sufficient reward for mitigation and resilience.

Finsbury is a decent, well-managed company but one which will have to run just to stand still in the prevailing challenging environment. In these circumstances, I believe the risk of earnings downgrades is significantly higher than the potential for upgrades and I see more appealing investment propositions elsewhere in the market.

The post Interserve plc isn’t the only stock I’d sell today appeared first on The Twelfth Magpie.

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G A Chester has no position in any of the shares mentioned. The Motley Fool UK has recommended Barclays and Lloyds Banking Group. 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.

It has seen its share price decline 16% over the past three months, culminating in today’s decline to a two-year trough. While this drop can hardly be considered nosebleed territory, I fully expect the Cardiff-based firm to remain locked in a downtrend as trading conditions become ever-more difficult.

Finsbury Foods, which supplies cakes, bread and morning goods for the retail and foodservice channels, announced today that while pre-tax profit rose 10% to £13m during the 12 months to June 2017, revenues clocked in at £314.3m in the period. This means that turnover on a like-for-like basis stagnated from the previous fiscal year.

Chief executive John Duffy, lauding last year’s performance, commented: “The [full year] results show strong resilience to the current challenges facing the industry and this strong performance, which has seen sales increase and profit margins improve, is testament to our long-term focus on driving efficiency and scale across the group.

“Investment to date has paid off and the initiatives implemented during the year will continue to ensure that we maintain our robust position as a low-cost and leading speciality baker in the UK over the next 12 months and beyond,” he added.

Leave it on the shelf

I am not so convinced by Finsbury Foods’ investment appeal right now, however.

The company has invested huge sums to light a fire under the bottom line and overcome the difficult trading environment, like the opening of a brand new artisan bread facility and creating a state of the art cake line, which is due to come online this year. As well, Finsbury Foods can also point to robust demand for fresh product ranges like the new collection from baking queen Mary Berry as reasons to be optimistic.

And against this background, the City expects earnings to rise 3% in the current fiscal year, resulting in an undemanding forward P/E ratio of 9.9 times.

However, Finsbury Foods faces colossal troubles that could blow these estimates off course. Indeed, I believe share pickers should remain cautious in the face of stagnating sales and rising input costs, the latter primarily caused by the introduction of the National Living Wage and the impact of sterling weakness on ingredients prices.

I reckon Finsbury Foods is one to miss right now despite its relatively-low valuations.

Global star

Given the choice, I would much rather plough my investment cash into Legal & General Group (LSE: LGEN).

I expect business to continue surging at the financial giant thanks to its concentration on key demographic drivers like an ageing global population, the move to digitalisation, and reforms of the Welfare State. Indeed, these factors helped push pre-tax profit 43% higher during January-June, to £952m. And it is expanding in the States to give profits an extra push in the years ahead.

The number crunchers expect Legal & General to record earnings expansion of 11% in 2017, creating a very-undemanding forward P/E rating of 10.3 times. And if this wasn’t enough, a predicted 15.2p per share dividend creates a terrific 6% yield. I reckon the company is a compelling pick at the current time.

The post Why I’d ditch this falling knife and buy Legal & General Group plc appeared first on The Twelfth Magpie.

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Royston Wild 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.

Baked-in profits

Like-for-like sales edged 0.3% higher to £314.3m last year at cake and bakery foodservice company Finsbury Food Group (LSE: FIF). The firm confirmed this morning that profits for the year ended 2 July are expected to be in line with market expectations, despite fairly tough trading conditions.

This AIM-listed group has a market cap of just £151m, but is a fairly high-quality business in my view. The group’s return on capital employed — a useful measure of profitability — rose from a historical average of about 10% to 14.5% in 2016. Operating margin edged above 5%, a respectable achievement for a business of this kind.

A further attraction is that unlike some sector rivals, Finsbury appears to have a fairly strong balance sheet. Net debt was £21m at the end of December. That’s equivalent to a net debt-to-EBITDA ratio of just 0.8, well below the two times threshold that’s generally considered to be a risk level.

So what could go wrong? The biggest risk for a business of this kind is that profit margins will be continually squeezed. Customers tend to demand lower prices, while raw ingredient and wage inflation can push up costs. One current problem mentioned by management in today’s update is the price of butter, which has doubled over the last year.

However, the group says it is having “productive discussions” with customers regarding the recovery of these extra costs. Finsbury shares edged lower after today’s news. But with the stock trading on a forecast P/E of 11 and offering a well-covered forecast dividend yield of 2.6%, I think this baker could be worth considering.

A star player

Many of the biggest names in the retail sector are struggling in the face of internet competition. One surprising exception to this is electronics group Dixons Carphone (LSE: DC).

Although you might expect the firm’s profits to be under pressure from low-cost online sellers, this doesn’t seem to be a big problem. The group’s latest results revealed that like-for-like sales rose by 4% last year, while adjusted pre-tax profit rose by 10% to £501m.

However, this apparently strong performance was flattered by £28m of one-off gains relating to lower-than-expected costs on long-term customer support contracts. In reality, I think it’s probably fair to say that underlying pre-tax profit rose by about 4% — in line with sales growth.

Although this may not seem so impressive, I think it’s a pretty solid performance in the current environment. The group’s 4% operating margin isn’t anything to be ashamed about either, and debt levels remain very low.

The market doesn’t seem to agree with my positive view on this firm. Dixons’ share price has fallen by 14% since its results were published on 28 June. That’s left the stock trading on a 2017/18 forecast P/E of just 7.7, with a potential dividend yield of 4.4%.

In my view, this downbeat valuation could be a buying opportunity for contrarian investors.

The post These ignored value stocks could help you retire early appeared first on The Twelfth Magpie.

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Roland Head 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.

Now could be a good time to buy them, ahead of what may prove to be an increasingly prosperous period. Here are two prime examples of stocks which appear to fit neatly into that category.

Improving performance

Reporting on Monday was speciality bakery manufacturer Finsbury Food Group (LSE: FIF). Although its revenue flat-lined in the first half of 2016 when compared to the same period of the prior year, its operating profit increased by 4%. This was due to a rise in operating margin of 20 basis points, which boosted pre-tax profit by 5.3% to £7.9m. This allowed it to raise dividends by 7.5% to 1p per share, while net debt of £21m equates to 0.8 times the annualised EBITDA (earnings before interest, tax, depreciation and amortisation) of the company. This shows that it remains financially sound.

Despite a tough operating environment, Finsbury Food has been able to drive through its planned investment programme. This has created a more diversified, multi-channel retailer that appears to be better placed to overcome the challenges in the wider food industry and economy. Its shares currently trade on a price-to-earnings (P/E) ratio of 11.3. Given its forecast rise in earnings of 5% in 2017 and 3% in 2018, this indicates that it offers upward re-rating potential. That’s especially the case since further innovation and investment may be on the horizon.

Certainly, Brexit poses an uncertainty for the company. It could lead to reduced sales and a lack of near-term growth. However, with a strong financial platform and a low valuation, Finsbury Food could be a sound long term buy.

A changing business

Likewise, Sainsbury’s (LSE: SBRY) appears to me to be a worthwhile investment for the long run. Its combination with Argos has thus far been a great success, with the latter posting like-for-like sales growth in excess of 4% in its most recent update. This helped to pull up a rather lacklustre performance from Sainsbury’s in what remains a challenging market.

Of course, the Argos acquisition is only one part of Sainsbury’s outlook. It is also seeking to remain ahead of the competition based on its pricing structure. In recent years it has been ahead of sector peers when it comes to pricing. Sainsbury’s was the first major supermarket to offer a comprehensive ‘price match’ service, while it also led the way in returning to a simpler pricing structure. This ability to connect with changing customer tastes and demands should serve the company well in future and provide the business with a competitive advantage.

With Sainsbury’s trading on a P/E ratio of 13.5, it seems to offer excellent value for money. Clearly, market conditions could worsen and lead to lower profitability. However, with a sound strategy and a margin of safety, now could be the right time to buy it for the long run.

The post 2 ‘hidden’ bargain shares for long-term investors appeared first on The Twelfth Magpie.

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Peter Stephens owns shares of Sainsbury (J). 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 company’s shares have already risen by 34% year-to-date and with Microgen now trading on a price-to-earnings growth (PEG) ratio of 2.2, it may be prudent to await a more attractive share price before piling in.

Good time to buy?

Also reporting today was Conviviality (LSE: CVR), with the convenience store chain’s share price rising by 10% following an upbeat set of full-year results. They show that the Bargain Booze operator has increased sales by 137%, with adjusted pre-tax profit rising by 124%. Key to this was a new organisational structure, while Conviviality’s integration plan is ahead of expectations for both Matthew Clark and Bibendum PLB.

Looking ahead, Conviviality is expected to continue its upbeat growth figures. Its bottom line is due to rise by 39% this year and by a further 15% next year, which puts it on a PEG ratio of 0.5 and indicates that now is a good time to buy it.

Contract win

Meanwhile, today’s contract win at Ultra Electronics (LSE: ULE) shows that the company is continuing to move in the right direction. The defence and aerospace business has been awarded a firm one-year contract valued at just over $4m from the US Navy for the continuing production of the ADC MK2 Countermeasure. Options to extend the contract for a further four years could increase the initial value to just under $34m.

Despite this positive news, Ultra Electronics is expected to increase its earnings by just 5% this year and by a further 6% next year. This is rather low given the company’s price-to-earnings (P/E) ratio of 13.5, which indicates that now may not be a perfect time to buy it.

Could do better?

Also releasing news today was Finsbury Food (LSE: FIF), with the bakery company reporting that strong trading has continued in the second half of the year. It’s therefore confident of delivering profits in line with market expectations, which were upgraded following the strong first half of the year.

Finsbury Food believes it’s well-placed to cope with any impact from Brexit due to it being a well-diversified and strong multi-channel business. But with earnings growth of just 4% pencilled-in for the current year and Finsbury having a P/E ratio of 12.6, there may be better value options available elsewhere.

Seeing (almost) double

Meanwhile, Seeing Machines (LSE: SEE) has stated today that it expects to report figures for the year to 30 June 2016 that are in line with market expectations. In terms of sales, Seeing Machines expects to report a figure of A$33.6m, which may not be quite double but is 77% up on the previous year’s total and shows that its business is moving from strength to strength.

Looking ahead, the company is forecast to remain lossmaking next year. Although it has a bright long-term future and could turn around its 26% fall in value since the turn of the year, there may be better options elsewhere in the small-cap space.

The post Are these 5 stocks ‘buys’ after today’s news? appeared first on The Twelfth Magpie.

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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.