For long-term investors, this could represent a buying opportunity. With that in mind, here are two shares which could deliver improving share price performance due to their low valuations.

Changing business

Reporting on Monday was oil and gas engineering services business Plexus (LSE: POS). The company reported its interim results, which showed that it is experiencing a period of major transition. The business has been through a period of low activity levels in recent years, and this has put significant pressure on its financial performance.

In the six months to 31 December, those difficulties continued. As such, dividends remain suspended and the near-term prospects for the company appear to be challenging. For example, in the current financial year it is expected to record a net loss for the third consecutive year.

However, Plexus could have recovery potential. The company recently sold its jack-up exploration application business, and this may provide it with the capital to focus on other areas that could offer strong growth. And with the oil price having risen, activity levels across the oil and gas industry could increase.

Certainly, the stock is high risk at the present time. Its share price could be volatile and come under pressure. However, with the potential for growth across the industry and its shares now being priced at 75% less than they were five years ago, a turnaround opportunity could be on offer.

Improving outlook

Also offering growth potential within the oil and gas sector is Wood Group (LSE: WG). The energy services company has experienced a difficult period, with its bottom line falling in each of the last two years. This has been at least partly due to the lower oil price which has caused oil producers to cut back on exploration spending.

However, Wood Group has been able to capitalise on lower valuations across the industry via its combination with Amec Foster Wheeler. This could provide it with a stronger foundation for growth and lead to a more robust outlook for the business. And with its bottom line due to return to positive growth in the current year, its prospects appear to be improving.

Looking ahead, Wood Group is expected to report a rise in its bottom line of 23% in the next financial year. This puts it on a price-to-earnings growth (PEG) ratio of just 0.5, which suggests that it offers a wide margin of safety. Therefore, with the prospects for the oil and gas industry on the up, now could be the perfect time to buy it for the long run.

The post 2 growth stocks trading at deep-value prices appeared first on The Twelfth Magpie.

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Peter Stephens 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.

Payouts unsustainable

But although the oil price has made a strong recovery since mid-February, the medium-term outlook is less optimistic. Further gains in the oil price will likely be limited without more substantial cuts to global supply, which just do not seem likely given the failure of OPEC to reach an agreement on a production freeze.

What’s worse, Shell’s downstream profitability appears to have already peaked. In the first quarter of 2016, the company’s downstream earnings fell by almost a quarter against the same period last year. Bigger refining margins have acted as a cushion against weak upstream profits, but this cushioning effect seems to be fast shrinking. And unless upstream earnings bounce back more strongly than analysts currently expect, Shell’s earnings could yet have further to fall.

Today’s share price sees the dividend currently yielding 7.6%. But with earnings cover set to fall below 0.5x this year — ie, less than half of what is needed to fund its dividend, continued shareholder payouts at current levels don’t seem sustainable for much longer. The only way Shell can afford to maintain its payout without raising debt is to sell more assets. That’s akin to selling the family silver, and could worsen future dividend security by hurting free cash flow generation in the longer term.

Better energy plays

Instead, investing in oilfield service stocks could be a better play on the energy sector. This is because although cuts in capital spending by oil producers have hurt the sector, rising global demand for energy is expected to drive continued growth in global oil and gas development in the longer term.

Petrofac (LSE: PFC) is a value play in the sector, with its shares trading at 9.3 times expected earnings this year. The company is also a less risky play, because its focus on the Middle East has spared it from the worst of the spending cuts. Relatively low production costs in the region meant investment levels have held up and Petrofac managed to lift its order book to record high of $20.7bn this year.

At a share price of 815p, Petrofac’s dividend yield stands at 5.7%. That’s lower than Shell’s yield but, unlike the oil major, Petrofac’s dividend is well covered. Earnings this year are expected to cover its dividend 1.9 times, which suggests not only that the dividend is secure, but that there may also be opportunity for an increase in shareholder payouts this year.

An alternative play on the sector is Plexus Holdings (LSE: POS). The firm has seen the value of its shares drop by almost two-thirds over the past year, but its longer term fundamentals seem attractive. The Aberdeen-based firm owns an innovative proprietary well-head system that is more reliable and requires less maintenance than the type its competitors use. This gives it a competitive advantage and allows it to generate much wider operating margins than the industry average.

The company is worth a closer look for investors that are willing to tolerate a little more risk.

The post Is it time to get back into Royal Dutch Shell plc, Petrofac Limited & Plexus Holdings plc? appeared first on The Twelfth Magpie.

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• 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?

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

An exciting year ahead

The release of the company’s full-year results could be the reason for this upturn in fortune for AFC’s share price. Although there appears to have been some profit taking immediately following the release, AFC’s results showed that the company continues to make encouraging progress. For example, last year it successfully tested multiple fuel cell stacks and completed milestone 10 of its POWER-UP programme. Furthermore, AFC has also signed heads of agreements with manufacturers and recently raised £3.6m through an oversubscribed placing.

Looking ahead, AFC is focused on the delivery of international contracts for the deployment of its fuel cell system and also on enhancing the operability of its fuel cell system. As such, 2016 could be another exciting year for the company and with cleaner fuels likely to become a more important part of the energy mix, AFC could be a worthwhile buy for less risk averse investors.

Better options elsewhere

Also rising today were shares in oil and gas engineering services business Plexus (LSE: POS) — they increased by 11%. Although there has been no significant news released by the company, its shares have soared by 26% in the last week alone. The latest piece of news released by the company was its interim results at the end of March where it outlined a plan to suspend dividend payments given the sharp reduction in exploration activity across the oil and gas sector.

While this may not be popular with many investors in the short run, the decision to suspend dividends seems to be a sensible one. That’s because it will help to shore up the financial standing of the business and could lead to a stronger company in the long run.

Looking ahead, Plexus is forecast to move into the red in the current year and to remain so in the following year. While it has the potential to turn its fortunes around, there appear to be better options available elsewhere in the oil and gas sector. Therefore, despite its recent share price run, Plexus does not seem to offer a sufficiently appealing risk/reward ratio to merit investment right now.7

On track to deliver

Meanwhile, shares in Iofina (LSE: IOF) were also among the major movers today, with them closing up a whopping 50%. This seems to be a carryover of yesterday’s performance when Iofina also rose significantly following the release of its first quarter update. It showed that the iodine explorer and producer remains on track to deliver its production guidance for the first-half of the year, with costs encouragingly being lower.

Looking ahead, Iofina’s dramatic share price rise could continue in the short run, although such a significant rise could also trigger a degree of profit taking. With Iofina forecast to move into profitability in the next financial year, investor sentiment could improve, although it remains a small and relatively high risk purchase at the present time.

The post Why Iofina plc, AFC Energy plc And Plexus Holdings PLC Are Among Today’s Major Movers appeared first on The Twelfth Magpie.

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Peter Stephens owns shares of AFC Energy. 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.

In a fresh update this morning, 88 Energy said that the permeability of core samples taken from the Icewine#1 well on the North Slope of Alaska was “20 times better than pre-drill forecasts”. Apparently, the core samples had permeability reads that were “too high to be measured using the traditional method” for shale rocks.

Dave Wall, 88 Energy’s Managing Director, described these permeability numbers as “super highways”. In today’s update, Mr Wall said that these results add to previous analysis and suggest that despite being a tight oil play, Icewine could provide “production rates more akin to those normally experienced in conventional wells”.

This news may sound impressive, but I’m not sure it really adds much to previous updates. No new figures were provided today. It’s too early to say what the production potential might be.

There are also some risks. We know from a September presentation that 88 Energy plans to raise new funding or secure a farm-out partner in 2016. This is likely to dilute existing shareholders.

Another concern is that 88 Energy’s exploration costs will rise sharply in July, when the tax rebate available for exploration in Alaska falls from 75% to 35%.

My cautious view seems to be shared by the market, as 88 Energy’s share price hasn’t really moved this morning. In my view, this might be a good time to lock in some profits.

How to time this recovery play

Shares in wellhead technology manufacturer Plexus Holdings (LSE: POS) fell by 6% this morning. The firm reported a £3.5m loss for the six months to 31 December and said it would suspend dividend payments.

Sales halved from £13.5m to £6.8m during the second half of last year, but the group was able to raise £8m from new investor Jereh China through a placing of new shares. This has left Plexus with a cash balance of £10.5m and net cash of £4.4m.

I’m confident that Plexus will survive, as its POS-GRIP wellhead technology is used and respected by many major operators. However, short-term exploration activity in the North Sea — a key market — is expected to fall by 90%, according to Plexus. The firm is targeting markets further afield, but so far sales have been limited.

Plexus shares are now down by around 85% from their 2014 high. Multi-bagging gains are possible when a recovery starts, but the short-term outlook is poor. I suspect it may still be a little too early to buy.

Get paid while you wait

If you want exposure to the oil and gas sector without too much risk, I believe that BP (LSE: BP) could be a good option.

BP appears to be committed to maintaining its dividend, which currently offers a forecast yield of 7.9%. The group’s costs have fallen sharply and I suspect that when the oil market does start to recover, BP shares could easily rise by about 20%.

If I’m right, then an investment in BP could deliver a total return of about 35% over the next 2-3 years, at fairly low risk. I’ve bought some myself and believe that BP looks a good buy at the moment.

The post Should You Play Safe With BP plc Or Buy 88 Energy Ltd And Plexus Holdings PLC? appeared first on The Twelfth Magpie.

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

A canary in the coal mine?

Some may remember the origin of the canary in a coal mine. The metaphor originates from the times when miners used to carry caged canaries while at work. If there was any methane or carbon monoxide in the mine, the canary would die before the levels of the gas reached those hazardous to humans.

Now before I type any further, I should warn readers that it can be a dangerous, not to mention expensive, game to forecast the prospects of other companies based on the reports of others. However, in this case, I think it’s worth exploring further.

While sat at my trading desk on Monday, I read a trading update from Plexus Holdings (LSE: POS) a smaller player in the Oil & Gas Related Equipment and Services sector. Now, while this company may be small, it does have some market-leading technology in the Python Sub-sea wellhead and its POS-GRIP products. These are supported by much larger companies such as BG Group, Total and Maersk. It also has a licensing agreement with major Chinese oil and gas manufacturing company Yantai Jereh Oilfield Services Group Co. to help distribute and market its POS-GRIP products to the wider global market.

Management reported that since the year-end, and in light of the weakness in the oil price, there was an increasing number of projects that were either delayed, postponed or cancelled. Accordingly, management expected earnings to be very significantly below market expectations. As you may expect, the shares fell out of bed, and despite a small recovery yesterday they’re less than half the price that they closed at on Friday.

A sign of things to come?

As we can see from the chart below, the only share under review here to outperform the FTSE 100 is Petrofac (LSE: PFC), however over a three-year period it’s on par with Amec Foster Wheeler (LSE: AMFW), both underperforming by over 50%.

It probably won’t come as any surprise to find that both companies are among some of the cheapest (on a 12-month forecast P/E basis) on the market. Both trade on multiples between seven and eight times forecast earnings, compared to the FTSE 100 forecast of around 15 times expected earnings according to data from Stockopedia.

That says to me that the market is worried that (like we have seen at Plexus) expected earnings could be subject to downgrades going forward, which in this market would surely send the shares in the wrong direction.

However, the opposite would be true should these companies manage to maintain expectations. Let’s not forget that these are businesses with size and scale, and with a steady hand they should be able to navigate the downturn.

Add into the mix the 5%-plus dividend yield on offer from both companies and it’s simple to see the attraction, despite the pessimism in the sector currently.

The post Is There Trouble Ahead For Petrofac Limited & Amec Foster Wheeler plc Following A Warning From Minnow Plexus Holdings plc? appeared first on The Twelfth Magpie.

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

Looking ahead, Plexus is shifting its strategy and will focus on cutting costs, reducing investment and also improving cash conversion to shore up its financial position. This seems to be a sound response to what are unprecedented trading conditions and despite such an environment, Plexus continues to be in discussions regarding a number of potentially significant projects worldwide. As such, its long-term outlook may still be relatively positive.

Clearly, Plexus is undergoing a very challenging period at the present time and with the potential for further falls in its valuation as the market adjusts to expectations in the short run, it appears to be a stock to watch rather than buy.

Think positive

Also reporting today is Ophir Energy (LSE: OPHR). Its shares have risen by 6% for two main reasons. Firstly, it has signed a Heads of Terms with Schlumberger for the latter to become an upstream partner in the former’s Fortuna FLNG project in Equatorial Guinea. This is positive news because it shows that the project is making progress despite challenging operating conditions, and it also helps to free up Ophir’s balance sheet and improve its financial flexibility.

Secondly, Ophir announced a relatively positive trading update that showed production in 2015 was higher than anticipated at 13,000 barrels of oil equivalent per day (boepd). And with Ophir having a net cash position of $360m and a low-cost production base that is cash generative materially below current commodity prices, its outlook appears to be rather positive. Certainly, Ophir is expected to remain lossmaking in 2016, but it could prove to be a sound, albeit risky, buy for the long term.

Worth the risk?

Meanwhile, Amec Foster Wheeler (LSE: AMFW) also continues to experience difficult trading conditions, with its second half update (released in November) stating that it has refreshed its strategy in response to an uncertain outlook. As such, the company has increased its cost-cutting targets, reduced future dividend payments by 50% and will focus on exiting low growth areas.

With Amec Foster Wheeler’s bottom line due to flatline this year, investor sentiment could remain weak following the 51% decline in the company’s share price during the last six months. However, with Amec Foster Wheeler trading on a price-to-earnings (P/E) ratio of just 6.5, it’s dirt cheap and for less risk-averse investors it seems to be a very strong buy for the long term.

The post Are Plexus Holdings PLC, Ophir Energy Plc And Amec Foster Wheeler PLC Too Risky To Buy After Recent Updates? appeared first on The Twelfth Magpie.

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• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?
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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.

Part of the reason for such strong share price gains has been record financial performance by the company. For example, in its most recent interim results 32Red reported total net gaming revenue which was 22% higher than the same period from the previous year. And with the recent acquisition of Roxy Palace, 32Red appears to have further top and bottom line growth ahead of it over the medium term.

In fact, in the current year 32Red is forecast to increase its bottom line by 62%. With the company’s shares trading on a price to earnings (P/E) ratio of 20.2, this equates to a price to earnings growth (PEG) ratio of just 0.3. This indicates that today’s large fall in its share price is unlikely to continue and, for less risk averse investors, 32Red could be a profitable buy in the long run.

Also falling today are shares in Plexus (LSE: POS), with the oil and gas engineering specialist posting a fall in its valuation of over 11%. As with 32Red, no specific news flow has been released by the company to warrant such a fall, although Plexus has been hit hard by a declining oil price in recent months which has sent its shares lower by 46% in the last six months.

Despite this weakening of investor sentiment, Plexus is still expected to post strong growth numbers in the current financial year. In fact, its bottom line is due to rise by 57% this year and this puts it on a PEG ratio of just 0.3. Certainly, the outlook for the oil and gas industry remains uncertain, but with Plexus having a niche product which has excellent long term growth prospects, now could be a good time for less risk-averse investors to buy a slice of it.

Moreover with the company increasing its final dividend by 182% in the most recent financial year, it appears to be confident in its long term prospects and in its financial standing.

Meanwhile, mobile payments solution provider Monitise (LSE: MONI) continues to fall, with its shares down by another 6% today to make it a fall of 88% in the last year. And until the company can show a clear path to profitability which is backed by the market, it would be of little surprise for its shares to continue their slide.

Of course, Monitise has endured a highly challenging period which has included management changes as well as disappointing financial performance. However, it still has a very appealing product and a list of blue-chip customers which means that it continues to have turnaround potential.

The problem, though, is the length of time it is taking for Monitise to transition from a great product to a great business with a black bottom line. And with a pretax loss of £27m forecast for the current financial year, it appears as though things could get worse before they get better for Monitise.

The post Will Monitise Plc, 32Red Plc And Plexus Holdings PLC Return To Share Price Growth? appeared first on The Twelfth Magpie.

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• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?
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Peter Stephens 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.

However, for those brave enough to venture into this sector, the rewards could be transformational to their portfolio. Of course, the opposite would be true should the price of oil slump further – again, I would point to the chart for the risks involved here.

A question of balance

With these parameters in mind, I believe that a ‘bar bell’ approach could well serve prospective investors well whilst venturing into this sector.

If it was my money on the line I would want to equally weight my selection, but given the three companies that I’ve picked — BP (LSE: BP), Plexus Holdings (LSE: POS) and Premier Oil (LSE: PMO) — I wouldn’t be looking to allocate an equal weighting in each company. Personally, I’d allocate 50% to BP and 25% to Plexus and Premier respectively.

The rationale behind this is two-fold. Firstly, the main part of your holding is in a mature, diversified, dividend-paying company, which — as you can see from the chart — has fared rather better than its smaller, more specialised energy sector peers, This company should offer some downside protection should the price of oil slip further. Secondly, whilst we can say with a degree of certainty that BP isn’t going to shoot the lights out, should the oil price begin to recover, I would expect a much more pronounced recovery in the price of the smaller Premier and Plexus, which are more exposed to the price of oil due to their more specialised operations.

Getting company-specific

Let’s take a look at the three companies in turn.

BP announced its results earlier this week, which beat expectations – always nice thing to do! Additionally, CEO Bob Dudley set out to reassure investors that the dividend was safe, even if there was further and sustained oil price weakness.

Furthermore, the company continues to rationalise its portfolio, and further divestments and cost cuttings are expected this year through to 2017.

“We have to be a leaner, fitter company, and simpler to operate,” Mr Dudley said.

On Wednesday, we saw results from Plexus Holdings. I have to say that I was rather impressed with the performance of this company, which is engaged in marketing a patented method of engineering for oil and gas field wellheads and connectors, named POS-GRIP, which involves in deforming one tubular member against another within the elastic range to affect gripping and sealing.

The headlines looked good: revenue +5.6% to £28.53m; profit before tax up 10.5% to £5.94m; and the final dividend increased by 182.3% to 1.75p… that suggests confidence in the future to me!

Management flagged that the outlook was still challenging, particularly in the North Sea; however, over the longer term they see prices set to recover and further adoption of their proprietary offering within the industry.

Finally, some might say the ‘dog’ of the trio in my view could well be a promising recovery play once the price of the black stuff stabilises. In its most recent update, management advised investors that banking covenants had been relaxed, capex had been reduced to an expected $500m in 2016 and the company had also secured a $92 price tag for around 60% of its expected H2 production, and $68 for around 30% of its expected 2016 output.

The company currently trades on a rather scary forecast price-to-earnings ratio of over 50 times earnings. However, although I fully expect plenty of volatility going forward, once the oversupply issue is resolved I believe that Premier could well deliver outstanding returns to those brave enough to invest.

The Foolish Bottom Line

One of the main issues currently depressing oil prices is the fact that there is still considerable oversupply in the market; however, once this works through, I’d expect to see the price stabilise and in time increase.

Whilst you wait, BP currently offers a near 7% yield — that’s twice the median forecast dividend yield of all dividend payers in the market!

The post Are BP plc, Plexus Holdings plc & Premier Oil plc The Perfect Combination For An Oil Recovery? appeared first on The Twelfth Magpie.

More reading

• Back below 500p, is it time to consider BP shares again?
• Just how bad could it get for the BP share price?
• BP shares are falling. But is the oil market actually tighter than investors think?
• How much is needed in a Stocks and Shares ISA for £357 of weekly passive income?
• Oil prices are falling. So why am I still bullish on BP shares?

Dave Sullivan 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.

WM Morrison Supermarkets

Shares in beleaguered grocer Morrisons (LSE: MRW) have resumed their familiar downtrend once more, the business shedding another 16% since the start of August and striking fresh 10-month lows just today. Trading at around 154p per share, Morrisons is just a whisker away from touching prices not seen since the turn of the millennium.

Indeed, with the situation steadily worsening for the Bradford firm, I reckon a plunge to these levels is an inevitability. Morrisons saw like-for-like revenues slide a further 2.7% during March-August, forcing underlying pre-tax profit 35% lower to £117m. Despite introducing a wide variety of measures in recent years, from new loyalty schemes to launching an online service, the company is no closer to stopping its customers flocking to its rivals.

Morrisons is facing a crisis of identity as it cannot compete with Aldi and Lidl on price, while customers seeking a better quality of product head off to the likes of Waitrose. The City expects the firm to punch a third successive earnings decline in the 12 months to January 2016, and a 6% drop is pencilled in. And I believe a consequent P/E ratio of 15.6 times is too high considering the lack of growth drivers at the firm, not to mention relentless march of its cut-price competitors.

Quindell

Well, where does one start with telematics business Quindell (LSE: QPP)? The firm’s shares resumed trading again in early August after a six-week hiatus — Quindell was forced to suspend dealing as its error-strewn financials were being scrutinised — and a subsequent 21% stock price dive to current levels suggests that investors expect more pain to come.

Last week US hedge fund Beach Point upped its stake in Quindell to more than 5% after purchasing some 420,000 shares, a move that followed the much-awaited appointment of new chief executive Indro Mukerjee in August. Along with other major boardroom installations, the Fareham business is hoping the move will represent a clean break from its past misdeeds, actions that have included everything from questionable asset sales through to dodgy share dealings at the top.

But Quindell continues to court fresh controversy, and has announced this plans to buy the 50.1% stake in PT Healthcare Solutions that it does not already control. But in typical Quindell style things are not that simple, as the new acquisition will be financed via a fresh share issuance. Further complications are not what investors are looking for, with the firm already the subject of a Serious Fraud Office probe and its revenues outlook under harsh scrutiny. I believe the business remains a risk too far for canny investors.

Plexus Holdings

Thanks to the effect of a tanking crude price, I believe that oil services provider Plexus Holdings (LSE: POS) can expect much more share price weakness in the weeks and months ahead. Shares have endured a bumpy ride over the past month amid rising fears over the Chinese economic slowdown, and with economic data continuing to worry — factory activity rose ‘just’ 6.1% in August, numbers showed this week — I believe Plexus could be in line for further woe.

The engineer is arguably in a stronger position than many of its peers thanks to its unique POS-GRIP friction-grip technology, a product developed in the wake of the 2010 Deepwater Horizon disaster. The gear not only improves safety but cuts costs, a critical factor in today’s climate of lower revenues, and last week the company launched its POS-GRIP Python Subsea wellhead in Aberdeen. Plexus also announced a deal with Aquaterra Energy to develop a new product based on its technology.

But with oil producers the world over drastically slashing their capex targets for this year and beyond, I believe demand for Plexus’ expertise could come under increasing pressure. The business is expected to punch a 5% earnings rise in 2015, a hefty reduction from the growth of previous years. And an ultra-high P/E ratio of 34.2 times leaves the business in danger of a hefty share price correction should crude prices continue to sink and exploration budgets undergo further revisions.

The post Should You Load Up On Troubled WM Morrison Supermarkets PLC, Quindell PLC And Plexus Holdings PLC? appeared first on The Twelfth Magpie.

More reading

• Forget meal deals! Here’s how £8 a day could be worth £357,000
• With a 7% yield, is this dividend share a no-brainer?
• The CMC Markets share price is smashing the FTSE 100 in 2026. Is there an opportunity here?
• 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?

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.

However, generalising can be dangerous since there are nearly always exceptions to the rule. As such, the resources sector, while enduring a very challenging period at the present time, could contain a number of companies that are not only worth investing it, but could deliver exceptional returns.

One such example is Genel Energy (LSE: GENL). Looking at its track record would be unlikely to cause many investors to buy a slice of the business since, in the last four years, it has been loss-making in two of them. And, with losses equating to £204m last year (versus a pretax profit of £122m in the previous year), it is clear that Genel is struggling to perform during the low oil price environment.

However, this look set to change. That’s because the company’s operations remain relatively robust (especially considering how closely located it is to the conflict in Iraq/Kurdistan) and, with the Kurdistan Regional Government (KRG) recently announcing a regular payment plan for producers in the region, investor sentiment could begin to pick up as Genel’s financial outlook starts to improve.

On this front, Genel is expected to post a pretax profit in each of the next two years, with £39m and £50m being forecast respectively at the present time. Certainly, these figures are considerably lower than the loss posted last year but, crucially, they show that Genel is able to cope with the dual challenges of a low oil price environment and political instability in the region in which it operates. And, with it having a price to book (P/B) ratio of 0.37, its margin of safety seems to be exceptionally wide and highly enticing for potential investors.

Similarly, Exillon Energy (LSE: EXI) may appear to be a stock worth avoiding right now. After all, its share price has fallen by 24% this year, which indicates that other investors are bearish on its prospects. However, the company has remained profitable throughout the current low oil price environment and, with it having a very lucrative asset base in Russia, is expected to continue to post upbeat profitability in each of the next two years.

In fact, Exillon Energy’s net profit is forecast to rise by 34% this year, and by a further 24% next year. These expectations mean that Exillon Energy trades on a price to earnings growth (PEG) ratio of just 0.1, which indicates that its shares are worth buying at the present time. And, with August’s production numbers breaking three consecutive months of declines, Exillon Energy’s share price may benefit from improving investor sentiment moving forward.

Similarly, engineering company Plexus (LSE: POS) also appears to offer excellent value for money – especially when its track record of growth is taken into account. For example, during the last four years it has been profitable throughout and has posted annualised earnings growth of over 61% during the period. Certainly, growth is due to disappoint this year, with it set to drop to just 5%, before rebounding next year with a figure of 44%.

And, while Plexus trades on a price to earnings (P/E) ratio of 33, its price to earnings growth (PEG) ratio of 0.5 indicates that now is a great time to buy a slice of the business.

The post Are Genel Energy PLC, Exillon Energy Plc And Plexus Holdings PLC 3 Resources Stocks To Buy Right Now? 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.