Cash from cash

The electronics payment sector is very competitive, but there’s plenty of growth likely for those who make a success of it. PayPoint (LSE: PAY) is one, and its installation in many thousands of retail outlets for paying household bills and the like has given it a bit of a headstart.

Adjusted earnings per share have been growing steadily, and the company is now in a transition phase after deciding to dispose of its mobile and online payments business and concentrate on its retailer operations. That will leave it with surplus capital, which chairman Nick Wiles has said will be returned to shareholders over the next five years (although special dividends might be deferred should attractive potential acquisitions show up).

The result is that the company’s progressive dividend policy is expected to provide an overall 6.5% yield for the year to March 2017, rising to 6.7% the following year — and that’s with the 963p shares on a P/E of 15 this year, dropping to 14.3 next. Who says you can’t have both growth and dividends?

Support services recovery?

Shares in support services and construction group Interserve (LSE: IRV) have slumped by 57% over the past 12 months. The firm’s acquisition of Initial last year has ramped up its debt position, and a trading update in May warned us to expect a £70m one-off cost in the first half from a contract that’s gone bad. For a company that recorded pre-tax profit of only £79.5m in 2015, it’s a significant hit.

The price fall has left the 281p shares on a forward P/E of only around 4, and has pushed the predicted dividend yield up to 9%! I think it’s very likely that the dividend will be cut this year, and such fear is surely behind the low valuation.

But markets almost always overreact to such fears as there’s still room for a sizeable dividend cut while leaving a reasonable yield this year. The problem is a one-off, and Interserve’s progressive dividend policy should see cash handouts remaining strong in the coming years. Expect some volatility, but definitely one to consider for the long term.

The death of paper

The fall in demand for print products like newspapers and magazines has taken its toll on Trinity Mirror (LSE: TNI) shares, which are down 58% since last November to 76p, and have lost 36% since the Brexit vote on 23 June. But have the pessimists gone too far?

The company’s July trading update told us the board “anticipates that our interim results will be in line with our expectations with continued strong cash generation over the period enabling a further fall in net debt“. That debt did stand at £92.9m at the end of December, which is a lot for a company with a market cap of £212m.

But does it really justify a forward P/E multiple as low as just a little over two when the long-term FTSE average is around 14? I don’t think so, especially with a 7.7% dividend yield forecast for this year followed by 8.3% next, which would be well covered by predicted earnings. Trinity Mirror is priced to go bust, but I can’t see that happening.

The post Are these the best small-cap dividends on offer? appeared first on The Twelfth Magpie.

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

Flight to safety

A lot of investors’ cash has been moved to shares considered safe, boosting Unilever (LSE: ULVR) — since the eve of the vote, the price is up 11.5% to 3,609p. It puts the shares on a forward P/E of 24.5, and that’s pretty high compared to the long-term FTSE average of around 14. And with dividends set to yield only 2.8% this year I can’t help wondering if risk-averse investors are overpaying now, especially as the company warned just before the event that “Unilever in the UK […] would be negatively impacted if the UK were to leave the European Union“.

At least there’s a decent year forecast for 2016, and we should have H1 results on 21 July. For Q1 we saw a 4.7% rise in underlying sales growth, including an 8.3% increase in emerging markets, with chief executive Paul Polman predicting “another year of volume-driven growth ahead of our markets, steady improvement in core operating margin and strong cash flow“. That really is the kind of thing that safety-conscious investors want.

Analysts have upped their revenue and earnings predictions in the last week, but that’s largely down to the falling value of the Pound boosting overseas earnings in Sterling terms. While Unliever investors are likely to avoid volatility, I don’t see great returns at today’s price.

Top telly

Shares in ITV (LSE: ITV) took a tumble too, dropping 30% from referendum day to 27 June, but since then they’re back to 176p for an overall fall of 20%, amid fears that ad revenue will fall as UK companies face squeezes in the months ahead. In a little less than 12 months, the once-popular ITV shares have lost 36% of their value.

Earnings forecasts for this year and next have been scaled back, but the price fall still leaves the shares on a price-to-earnings multiple of 10.5 for this year, dropping to under 10 next. Those will be based on a consensus that’s now a little out of date, but even with a modest downgrade that could still look cheap.

ITV’s first half figures should be with us on 27 July, and investors will be looking for them to build on a 14% rise in revenue in Q1 when the company predicted “good group profit growth” for the half. The figures won’t include any Brexit impact yet, but any thoughts from ITV on the resulting outlook for the rest of the year will be crucial.

Banker bashing

The banks were among the hardest hit by the vote, with Lloyds (LSE: LLOY) shares down 27% to 53p since 23 June. Lloyds should be revealing halfway figures on 28 July and I can picture its bosses tearing up their prepared outlook section and rushing to put together a replacement now we’re heading for the EU exit door.

Now that Lloyds, and other UK’s banks, faces massive uncertainty over the future of its membership of the EU passport scheme for banking services, the falling shares are understandable, but is it fair?

The shares are on a forward P/E of only a little over seven, and this year’s forecast dividend yield is up to 7.2%. That looks a strong contrarian buy to me, unless the market’s worst fears do come to pass — and worst fears usually don’t.

The post 3 dates for your July investing diary (Unilever plc, ITV plc and Lloyds Banking Group plc) appeared first on The Twelfth Magpie.

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Alan Oscroft owns shares of Lloyds Banking Group. The Motley Fool UK owns shares of and has recommended Unilever. The Motley Fool UK has recommended ITV. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Shares in Poundland (LSE: PLND) haven’t done too well since the cut-price shopping chain came to market in March 2014. The timing didn’t seem unreasonable, with the UK coming out of recession and a bit of optimism appearing, but Poundland shares started to fall in August 2015, and now they’re down 55% to 174p since flotation.

The company’s acquisition of 99p Stores looks set to contribute to a 37% fall in EPS this year, but I think any downgrading of the shares on that basis is short-sighted. I know forecasts are hard to evaluate at this early stage, but the 59% rebound predicted for the year to March 2017 followed by a further 22% growth penciled in for the following year would drop the P/E down to around 10.5. It would also provide PEG ratios of 0.2 this year and 0.5 next, with growth investors typically seeing 0.7 and below as a good indicator.

So, on growth fundamentals, Poundland now looks attractive, and there’s a progressive and well-covered dividend to be had too. The yield based on expectations for the year ended in March this year would only be around 2.5% — results are due on 16 June, with the firm’s Q4 update calling it a “transformative” year. But the yield is set to reach 3.9% in two years time. Worth tucking away for a decade? I think so.

No more paper?

Shares in Trinity Mirror (LSE: TNI) seem to be perpetually cheap, and are currently on a forward P/E of only around 3.5. Of course, fears for the future of actual printed newspapers weigh heavily on the company, especially after the failure of The New Day which only lasted nine weeks before the plug was pulled.

But the company has been on the acquisition trail, owns an increasing stable of online publications, and its fundamentals actually don’t look too bad at all. Earnings are expected to grow this year and next, albeit slowly, and dividend yields (which would be covered more than fivefold by earnings) of 4.7% and 5.3% are predicted for the two years.

I reckon reports of the demise of the company are greatly exaggerated, and for long-term investors I think there’s profitable life in Trinity Mirror shares yet.

Change of focus

Helical Bar (LSE: HLCL) is a property investment and development group, and it has recently switched its focus towards the London market — and in results released on Tuesday it reported record pre-tax profits of £120.1m for the year ended in March. The company’s property portfolio is now apparently valued at £1.23bn, which is a 21% improvement on a year previously.

As he ends his 32-year tenure as chief executive, Michael Slade said that

“Since 2012, we have targeted an income producing investment portfolio representing at least 75% of our total property assets with our development programme making up the remaining 25% which is capable of producing exceptional profits“

and told us the firm has exceeded its targets.

Mr Slade did point to a possible Brexit from the EU as presenting risks, but Helical Bar looks like one of those companies that is genuinely looking at the long-term prospects for its business, and that can only be a good thing.

The post 3 small cap shares for the next decade: Poundland Group plc, Trinity Mirror plc, Helical Bar plc? appeared first on The Twelfth Magpie.

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Alan Oscroft 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.

Buffett only invests in the best companies, which have wide moats, a reliable income stream, intelligent management and a history of success. A strong brand is also important to Buffett, as without that, the company in question will struggle to rise above the competition. 

Finding Buffett-esque companies is difficult and requires plenty of research. There are a few businesses that meet all of his criteria. Vodafone (LSE: VOD) is one such company.

Reliable income 

Vodafone has a huge moat in its European, South African and Indian telecoms network. It would cost tens or possibly even hundreds of billions of pounds to replicate the company’s existing infrastructure. Additionally, it’s a strong brand that’s internationally recognised. That being said, Vodafone’s market share is under attack in some regions, and while the company is now fighting back, the outlook is no longer as bright as it once was.

Still, Vodafone’s wide moat means that the company is a perfect income investment, the sort of investment that Warren Buffett might buy. The company’s shares currently support a dividend yield of 5.3%, and the payout is expected to rise in line with inflation for the next few years.

Prized assets 

ITV (LSE: ITV) is a company that could fit quite comfortably into Warren Buffett’s equity portfolio. ITV has a leading market share in the UK’s television market. What’s more, the company is branching out into online content and has built a vast content library, which can be sold to various other networks around the world. This library is one of ITV’s most prized assets and should continue to generate a steady income stream for the company going forward.

ITV’s growth since 2011 has been nothing short of outstanding. If the company meets City forecasts for growth for the next two years, by the end of 2017 ITV’s pre-tax profit will have tripled in seven years. Off the back of this growth, the company’s shares have gained around 200% since the beginning of 2011 and ITV continues to return excess cash to shareholders via special dividends. The company’s shares currently trade at a forward P/E of 13.3 and support a regular dividend yield of 3.1%.

Growth in a competitive market 

Sky (LSE: SKY) is one of the most recognisable brands in the UK and Europe. The company has shown its resilience and strong relationship with customers over the past few years as competitors such as Netflix, Amazon, BT and other content streaming providers have all started to nibble away at the company’s market share.

However, despite this competition, Sky’s pre-tax profits are up around 50% since 2011 and City analysts are forecasting a further 11% growth in EPS this year. Sky’s shares currently trade at a forward P/E of 16.2 and support a dividend yield of 3.4%.

The post SKY PLC, Vodafone Group plc & ITV plc Have The Traits Of A Warren Buffett Investment appeared first on The Twelfth Magpie.

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

It’s pretty hard to argue against ARM Holdings (LSE: ARM), the world-beating mobile computing chip specialist. The value of ARM shares has multiplied sevenfold in the past decade, to 1,004p as I write. The price has been flat over the past three years, but earnings have been growing nicely and the P/E rating of the shares has fallen to a more attractive level.

Forecasts for this year suggest a 43% rise in earnings per share (EPS), giving us  a P/E multiple of 29. At around twice the FTSE 100 average, that might seem high, but it’s the lowest it’s been in years and is good value for such a strong growth candidate. The other attraction with ARM is dividend that’s growing well ahead of inflation — by 25% in 2015, with a further 12% hike forecast for this year. Share price rises have kept the yield down, but at this rate you’d soon earn a decent yield on your purchase price if you bought today.

Back when I first started looking at ARM, I liked to point out that mobile computing was still in its infancy. Today, years later, it still is! City analysts have a strong buy consensus out for ARM, and they have my full agreement.

Buy on weakness

BAE Systems (LSE: BA) is very much a leader in its field, although tightened belts in aerospace and defence have squeezed earnings growth. According to forecasts, there should be no real change in earnings between 2013 and 2017. The share price has lost 5% over the past 12 months, to 504p, but over five years we’re still looking at a 51% rise that’s way ahead of the 3% the FTSE 100 has managed.

On top of that, BAE is paying dividends that easily beat the average, with shareholders having enjoyed a 4.2% yield in 2015 and with 4.3% on the cards for this year. The company has a policy of maintaining “long-term sustainable cover of around two times underlying earnings,” and we should hear more when interim results are released on 28 July.

Again, the brokers are pretty bullish about BAE, and so am I — for the long term, certainly, and that’s what counts for an ISA.

Top telly provider

I’ve suggested before that BT Group is my pick of the telecoms sector, but I’m impressed by the prospects for Sky (LSE: SKY) too, and when we think about the supply of TV content it’s still head and shoulders above its rivals. We’ve seen EPS flatten-off over the past couple of years, but there’s an 11% lift forecast for the year to June 2016. At the interim stage we heard of a 12% rise in underlying operating profit and a 10% rise in underlying EPS, so that forecast is probably not far off the mark.

On a forward P/E of around 16.5, Sky shares might not seem screamingly cheap. But with strong growth potential in the coming years and with a progressive dividend policy, I see good value for ISA investors here.

No time to lose

Anyway, whether you like these three or prefer others, make haste — for the current ISA allowance ends in just a week.

The post Do ARM Holdings plc, BAE Systems plc And SKY PLC Make A Great ISA Trio? appeared first on The Twelfth Magpie.

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

Quarto is an illustrated book publisher and distributor, with a market cap of around £50m, and it’s just released full-year results that beat expectations. With adjusted pre-tax profit up 18%, adjusted earnings per share rose 13%, and the total dividend of 9.5p per share is 6% ahead of last year and yields 3.8% — and it’s covered 3.4 times by earnings. Net debt was cut by 10% too, which is a good sign, with chief executive Marcus Leaver telling us that the firm intends to “steadily reduce net debt further“.

Forecasts suggest two years of EPS growth at 11-12% per year, which would put the shares on a P/E multiple of under seven for 2016, dropping to just six on 2017 forecasts, and would provide PEG ratios of around 0.6. That suggests good growth value to me, and on these fundamentals I’d say Quarto is looking attractive.

Solar power

Shares in PV Crystalox Solar (LSE: PVCS) perked up 4% in early trading to 9.7p, after full-year results revealed an increase in revenues from €53.3m to €64.5m. The company makes photovoltaic silicon wafers, used for capturing solar energy, and it’s been suffering from weak pricing. But chief executive Iain Dorrity told us that the price of wafers “has shown some modest recovery during recent months while the price of polysilicon, the key raw material, has fallen to historic lows“, and that wafers can now be sold at more than their cash cost of production.

The company still widened its loss for the year and is extending a strategic review of its business in what are still difficult trading times. Vernalis had net cash of €12.7m on its books at the end of December, albeit down from €24.6m a year previously and possibly close to the limit if it suffers a further loss in 2016. But analysts are expecting just about break-even. It sounds like 2016 could be a pivotal year — and if demand for solar energy is on the rise, we could be at a good (if risky) buying point.

Medical recovery

My third candidate today is pharmaceuticals firm Vernalis (LSE: VER), whose first-half results led to a 12% drop in the share price to 52p. The shares soared to 87p back in September 2015 on the back of hopes for the firm’s Tuzistra XR cold treatment, but since then shareholders have been hit with a 40% fall.

Interim results showed a revenue increase to £6.1m from £5.7m, with Tuzistra XR contributing £0.6m to that — and it represents the direction the firm is going in the “major transformation in our business” described by chief executive Ian Garland, to specialize in cough and cold treatments.

There’s no annual profit forecast yet, but predicted losses per share are tumbling and the four brokers offering an opinion have Vernalis as a ‘strong buy’. It’s another risky one, but if profitability can be achieved by 2018 then we might be on to a winner.

The post 3 Small Caps Set To Soar: Quarto Group Inc, PV Crystalox Solar PLC, Vernalis plc? appeared first on The Twelfth Magpie.

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Alan Oscroft 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.

There’s a huge volume of facts and figures, not to mention the seemingly-never-ending institutional comment to digest. So it can take investors a while to come around to the appeal of certain companies, meaning that sometimes there are opportunities to be had for those prepared to look past the next quarter’s trading update.

A game of two halves

On that thought, I’ve been looking a little closer at two companies that have caught my eye over the reporting period. Barclays (LSE: BARC) is one of the ‘bad banks’, which seems to be unable to go a day without being in the news, and broadcaster ITV (LSE: ITV). Both reported last week and both share prices fell following the announcements.

Before we dig deeper, a quick look at the three-year chart below shows that there’s been a clear divergence in the share price over the last three years. Obviously, there’s usually a good reason for both positive and negative reactions to company results. The longer term one looks, the more accurate these reactions seem to be as the market eventually becomes the weighing machine it’s supposed to be.

For me, one standout reason for the differing share price can be seen by looking at the earnings performance over the last three years (2013-15 inclusive).

It’s clear ITV is the star performer here as it has managed to grow normalised earnings per share (NEPS) by 60%, from 9.21p in 2013 to 14.7p in 2015.

On the flip side, Barclays has seen the same normalised NEPS figure reduce by 72%, from 5.92p in 2013 to 1.65p in 2015, according to data from Stockopedia.

Notwithstanding the negativity in the market in general, and some concerns about debt, it’s fairly easy to see why one share has outperformed the other.

Dividend appeal versus dividend dog

Another measure of outperformance can be seen in growth of the dividend. Again, here we can see that ITV has outperformed, looking at the same three-year period. Inclusive of the three special dividends, which accompanied the normal dividend at year-end, shareholders at ITV have seen the total payout rise by 113%, from 7.5p in 2013 to 16p currently. Even if investors wanted to strip out the special dividend, the normal dividend has risen from 3.5p to 6p over the same period or by 71% – none too shabby.

On the other hand, Barclays shareholders have seen a flat dividend of 6.5p over the last three years, this will now be cut to 3p for 2016 and 2017 as the bank restructures. On the other hand ITV has pledged to grow the ordinary dividend by at least 20% to 2016.

Will You Grow Richer In 2016?

So for me the choice is a simple one – I like to see growing dividends as I find it a key measure of confidence going forward, and while there may be value in Barclays shares down here – they’re not for me currently.

The post Why I’m Buying Into The Special Dividend At ITV plc and Avoiding The Dividend Cut at Barclays plc appeared first on The Twelfth Magpie.

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

With the acquisition of EE, the UK’s largest mobile network, and its £2bn investment in sports and other prime telly, BT can now compete with the rest on all telecoms services. And with forecast P/E multiples of only around 13 to 14, it’s not an expensive foray into the sector.

Expensive mobile

Compare that with Vodafone (LSE: VOD), and you’ll see a company that only does mobile telecoms and whose share price has gone nowhere in the past five years – it’s the weakest performer of the four, with just a gain of 15% to 217p. Granted, Vodafone has higher dividends on the cards, with more than 5% forecast for this year and the next two. But they’re nowhere near covered by earnings, and the shares are on a P/E for the year to March 2016 of more than 44!

Vodafone is developing its next-generation network which will cover a fair amount of Europe, and that will surely boost profits some time in the future. But right now the outlook is uncertain, and the shares seem to be priced for a takeover – they’re too expensive in my book.

Second place?

The five-year share price record for Sky (LSE: SKY) isn’t too hot either, with just a 22% gain to 1,004p. Dividend yields come out slightly ahead of BT’s with 3.4% forecast for the year to June 2016, and they’re well enough covered and are progressive. But on P/E terms, the shares look a little pricey to me – this year’s forecast gives us a multiple of 16, rising to above 17 with an earnings fall predicted for 2017.

Sky’s biggest non-financial strength is its position on the premium TV market, and though BT has made small inroads and cable TV is a serious competitor, Sky looks like it will be the dominant provider, especially for sports, for the foreseeable future.

Security breach, oh dear!

TalkTalk Telecom (LSE: TALK) shares were actually outperforming BT until June last year, but they were already going off the boil before a damaging security breach in October 2015 exposed some customer data to hackers. Thankfully the damage was small, but it has shaken confidence in the company’s ability to protect its customers. The share price retreated to a five-year gain of 77.5% – better than Vodafone and Sky, but still way behind BT.

The price has regained 24% since February’s low, to 239p, and there’s strong double-digit earnings growth forecast for the next couple of years, but it would take until March 2018 to get the P/E down under 14 from today’s 25. TalkTalk also has what I see as a bizarre dividend policy. It’s been making uncovered payments for the past two years with the same expected for March 2016’s mooted 6.6% yield, but even by 2018 we’d still see it only just covered.

There’s room in the telecoms sector for all four to do well, but BT still looks the most prudent long-term buy to me.

The post Why BT Group plc Still Beats Vodafone Group plc, SKY PLC And Talktalk Telecom Group PLC appeared first on The Twelfth Magpie.

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

Then in April 2015 an exciting upgrade to oil estimates at the Horse Hill-1 well in the Weald Basin, in which the company owns a stake of a little over 20%, helped send the shares spiking upwards. The price has been erratic since, but recent updates on 17 February and 1 March on flow tests from the well have given the shares an extra boost to today’s 2.5p.

So can the UK Oil & Gas share price keep on climbing in the year ahead and beyond? Well, we still don’t know what sustainable long-term oil flows might be like at the so-called Gatwick Gusher, or how much of the estimated 9.2bn barrels is likely to be commercially viable, or where the cash for the long-term development of the field is going to come from… but if you’re brave enough, I wish you well.

Glad rags

The fashion business is surely one of the riskiest, as a look at the extremely erratic share price of Supergroup (LSE: SGP) over the past few years will attest. Despite a couple of attempts, the shares haven’t regained their peak of February 2011, and at 1,323p they currently stand almost 25% down from then.

But over the past 12 months we’ve seen a 41% rise — and the past three years of earnings growth coupled with three more years of growth forecasts could even see the shares marked down to a P/E in line with the FTSE 100 average. The current year, to April 2016, is expected to show a 16% rise in EPS, and the pundits have further growth in the teens marked in for 2017 and 2018 too — and we should be seeing a start to dividends too.

There’s a clear buy consensus out there, but fashion is too fickle a business for me to get into.

The best comparison site?

Moneysupermarket.com (LSE: MONY) shares are up 27% in the past 12 months, to 339p, and up a whopping 268% in five years. Years of strongly-rising earnings lie behind the success story, with today’s results for the year ended December 2015 showing a further 18% rise in adjusted EPS leading to a 14% hike in the annual dividend — the 9.15p payment yielding a middling 2.7%, but rising.

The firm has apparently been trading solidly in the two months since year-end, but earnings growth is forecast to slow a little to around 8% per year for the next two years, putting the shares on P/E multiples that look a bit high to me at around 20 and above.

Moneysupermarket’s share price growth in recent years has been very impressive, but I can’t see it continuing at the same pace — I expect to see it slow down over the next few years.

The post Can UK Oil & Gas Investments PLC (+410%), SuperGroup Plc (+33%) And Moneysupermarket.Com Group PLC (+27%) Keep On Climbing? appeared first on The Twelfth Magpie.

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

Down but upbeat

Look at Redrow (LSE: RDW), whose shares have bizarrely dropped 5.6% to 398p on the day the homebuilder released upbeat first-half results. With revenue up 8% to £603m, a half-year record, earnings per share gained 15% and the interim dividend was doubled to 4p per share. This came after legal completions rose by 18%, and the firm’s gross margin perked up to 24.2%.

So what’s the growth picture? Well, before today analysts were forecasting a 13% EPS rise for the full year to June 2016, which would put the shares on a PEG ratio of 0.6 — lower is better, and growth investors typically look for 0.7 or less. But with chairman Steve Morgan telling us that “demand for new homes remains robust” and that he’s “confident this will be another strong year of growth for Redrow“, I could see that 15% first-half gain carrying on through.

That would drop the PEG a fraction and put the shares on a P/E of only 7.8 — and that’s just got to be cheap!

Top property site?

Casting a growth eye on property website operator Zoopla (LSE: ZPLA) throws up a PEG ratio of 0.7 for the year to September 2016. Although the share price was pushed up in the first half of 2015, the later loss of sentiment has brought us a 24% fall since the end of June, to today’s 205p. Although we’re looking at a prospective P/E of 19.5, which is ahead of the FTSE’s long-term average of around 14, EPS forecasts make that seem not too stretching at all.

Zoopla recorded a 29% rise in EPS in 2015, and there’s the same again currently being predicted for this year. UK interest rates will be remaining low for longer than many of us expected and we might not even see a rise until 2017 now, the UK economy is gathering strength, and the housing market remains buoyant — and I can see another couple of strong growth years for Zoopla.

Online payments

The online payments business is risky, as we’ve seen with the sad decline of Monitise in the past couple of years. But things are looking very different for Paysafe (LSE: PAYS), formerly known as Optimal Payments, whose shares are up 61% over the past 12 months, to 342p. The recent FTSE retreat has pushed the price down, mind, and we’ve seen a 14% fall since 4 February. So does that give us a cheaper growth opportunity?

A fourth quarter update told us that revenue and earnings will be ahead of market expectations — and the markets had a 29% EPS rise penciled in. There’s a further 40% lift to EPS forecast for 2016, and that would put the shares on a distinctively average P/E of 14.5 and a PEG of just 0.4.

And if that doesn’t look like a decent growth opportunity, then I don’t know what does.

The post 3 Great Growth Picks For 2016: Redrow plc, Zoopla Property Group PLC, Paysafe Group Plc? appeared first on The Twelfth Magpie.

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