The combination of Premier Farnell and Daetwyler seems to be a logical one in terms of their product offerings. Their ranges seem to be a good fit, while distribution channels and geographic footprints may also prove to be complementary. Synergies are also expected to be achieved from the enhanced scale of the combined entity, with synergies from cross-selling and line-fill effects due to be recorded alongside a stronger procurement position.

Trading update

News of the deal was released alongside a first quarter trading update from Premier Farnell, which showed that its trading remains very mixed. Sales growth of 1.5% was recorded in Europe and Asia Pacific continues to be a strong performer with sales being 25.7% up on the year. But elsewhere Premier Farnell continues to struggle. For example, in the Americas sales fell by 9.9% and this means that overall sales were down by 1.4%.

Key reasons for this were negative currency effects as well as a weakening in US manufacturing conditions and competitive pressures. As such, a US sales reorganisation was undertaken last month as Premier Farnell seeks to deliver operational efficiencies, while annualised cost savings of £19m are on track to be recorded in 2017/18.

Looking ahead, Premier Farnell is forecast to increase its bottom line by 27% in the current year and by a further 17% next year. Clearly, these are impressive rates of growth and yet prior to today’s offer from Daetwyler, the company’s shares traded on a price-to-earnings (P/E) ratio of just 10.5. Today’s deal puts Premier Farnell on a P/E ratio of 15.9 and while this may at first glance appear to be generous, it also puts Premier Farnell on a price-to-earnings growth (PEG) ratio of just 0.7.

Cheap buy?

As such, it could be argued that Daetwyler is buying Premier Farnell on the cheap. Certainly, Premier Farnell has endured a challenging period in recent years and has recorded declining profitability in each of the last four. Furthermore, its sales performance remains mixed. However, it appears to have a sound strategy through which to turn its performance around and with such impressive forecasts, it seems to be on track to achieve its medium-term goals.

So, while a 50% overnight gain is always welcome, it could be the case that Daetwyler is obtaining a high quality company at a relatively appealing price.

The post Premier Farnell plc surges 50% on 165p-per-share Daetwyler deal 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.

Property play on the charge

Property investment trust Shaftesbury (LSE: SHB) gave the market a bubbly trading update Friday, news that sent shares 2.3% higher from the prior close.

Shaftesbury advised of “continuing strong tenant demand” between 1 October and 4 February, “underpinned by robust footfall and spending“. The company said that strength in the London economy has supported strong tenant demand across both retail and leisure sectors.

The City fully expects earnings to keep accelerating at the London-based business. A 14% advance is chalked-in for the period to September 2016, leaving Shaftesbury dealing on an elevated P/E rating of 62 times.

A projected dividend of 14.5p per share for the year, yielding a handy 1.7%, lessens the blow of this heady multiple somewhat. And while Shaftesbury remains an expensive stock selection by conventional metrics, it could be argued the firm’s strong upward momentum — facilitated by its exposure to the strong London economy — fully justifies such a premium.

Divestment news drives shares skywards

Electronics manufacturer Premier Farnell (LSE: PFL) also made the headlines after announcing the sale of its firefighting and emergency response unit Akron Brass for $224.2m. News of the divestment sent shares 6.6% higher from Thursday’s close.

In other news, Premier Farnell also advised that profits for the year to January 2016 should fall within its previous guidance of £73m to £77m.

The divestment of Akron Brass will allow Premier Farnell to “pursue growth opportunities within the core electronics distribution business,” it said, not to mention boosting profitability in the current period and cutting its debt pile.

The number crunchers expect earnings to fall 18% in the year to January 2016, while a hefty dividend cut from 10.4p per share to 6.2p is currently pencilled-in.

But a 3% earnings bounceback is predicted for the current period, leaving the business dealing on a mega-cheap P/E rating of 8.7 times. And another estimated 6.2p dividend creates a bumper 6% yield.

However, as sales continue to deteriorate badly across its core European and North American markets, I believe investors should be cautious concerning current forecasts before piling into what is, conventionally-speaking, an ultra-cheap stock. I reckon Premier Farnell could be set to endure further travails as macroeconomic turbulence worsens.

Grocer on the ropes

Shares in struggling grocery giant Sainsbury’s (LSE: SBRY) continue to be volatile, thanks partly to the divisive move to hoover up embattled Argos owner Home Retail Group.

The stock price was more settled in Friday trading, however, and was last up 1% on the day.

Sainsbury’s finally nailed its acquisition of Home Retail Group this week after its first approach in November, a £1.3bn bid being enough. But I believe the business has bitten off more than it can chew — indeed, Sainsbury’s now has to revive two battered businesses at great cost.

The City expects Sainsbury’s to follow a 16% earnings decline in the year to March 2016 with a 3% dip next year, leaving the business dealing on P/E ratings of 11.3 times and 11.1 times respectively. And a predicted dividend of 10.6p per share through to the close of 2017 creates a chunky 4.6% yield, even if this represents yet another dividend cut.

But like Premier Farnell, I believe investors should continue to avoid the company. The competition from both discounters and premium chains continues to intensify, leaving Sainsbury’s little choice but to keep slashing costs at the expense of earnings. And I have little faith in the firm’s ability to resurrect Argos given its continued failure to turn around its own core grocery business.

The post Should You Buy J Sainsbury plc, Shaftesbury plc & Premier Farnell plc On Friday? appeared first on The Twelfth Magpie.

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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.

Cigarette maker set to soar

The tobacco sector has long been a happy hunting ground for those seeking dependable dividend growth year after year. The terrific earnings visibility associated with their defensive operations has made the likes of British American Tobacco (LSE: BATS) a strong performer for income seekers, and I expect this trend to continue well into the future.

The company’s portfolio of market-leading brands like Pall Mall and Lucky Strike carry formidable pricing power that enable the business to keep revenues growing irrespective of wider pressure on consumers’ wallets.

On top of this, British American Tobacco’s decision to enter hot growth segments like e-cigarettes also provides the firm’s revenues outlook with plenty of ammunition.

The business has already entered the market through its Vype technology, and its decision to ink a technology-sharing agreement with Reynolds American earlier this month could push its vapour-related sales onto the next level.

My positive take is shared by the Square Mile’s fleet of number crunchers, and British American Tobacco — shrugging off a marginal earnings decline — is expected to lift the dividend in 2015, to 156.2p per share from 148.1p last year. Consequently the business offers a market-mashing 4.1% yield for the period.

And supported by a 7% bottom-line improvement in 2016, the cigarette play is anticipated to lift the dividend yet again, to 164.3p and thus pushing the yield to 4.3%.

Electronics play on the back foot

I believe the dividend outlook over at electronics manufacturer Premier Farnell (LSE: PFL) is far less assured than that of its FTSE peer, however.

The Leeds-based business advised on Thursday that group sales per day in the third quarter grew by a meagre 0.5% between August and October, although revenues would have dipped 2.3% had it not been for the success of its Raspberry Pi budget computer systems.

Consequently Premier Farnell advised that “operating profit [this year] is expected to be in line with previous guidance, albeit towards the lower end of the profit range.”

The company said that sales in Europe and the Americas continued to fall, adding that “a more challenging trading environment in the industrials space” in the latter territory — a region from which a third of revenues are generated — remains a headache.

The City expects Premier Farnell to fork a full-year dividend of 6.2p per share for the years ending January 2016 and 2017, down from 10.4p in recent years although still yielding an eye-watering 6%.

But given that conditions in its all of its markets bar Asia remain difficult — Premier Farnell elected to cut the interim dividend by more than 40% in September in light of these issues — I believe current payout projections could fall well wide of the mark.

The post Should You Buy ‘Mega Yielders’ British American Tobacco plc & Premier Farnell plc? appeared first on The Twelfth Magpie.

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Is this a golden opportunity for income investors to top up, or are these high yields a warning that cuts may be in the pipeline?

Foxtons

Shares in London estate agent Foxtons have fallen by 38% since June, as the London property market has slowed. This has left Foxtons shares offering a dividend yield of 6% for the current year.

However, the housing market hasn’t crashed. Nic Budden, Foxtons’ chief executive, said the firm had a £1bn sales pipeline heading into the fourth quarter. That’s more than at the same time last year. Foxtons has other attractions, too.

The firm’s high pressure sales model may not suit everyone, but it does appear to deliver results. Foxtons is continuing to expand its branch network and earnings per share are expected to rise by 3% to 12.2p this year and by 10% to 13.5p in 2016.

Foxtons’ 26% operating margin and low costs means that it generates a lot of free cash flow. Net cash was £20m at the end of June.

I think there’s a good chance Foxtons dividend will be maintained at current levels, unless the property market really crashes.

BP

Another firm which has protected its dividend in the face of tough market conditions is BP. The group said recently that it aims to balance its cash flow for an oil price of $60 per barrel by 2017.

Chief executive Bob Dudley described the dividend as “a strong priority”. The latest broker forecasts suggest that group’s $0.40 per share payout will be maintained next year. This gives BP shares a prospective yield of 6.8%.

Market confidence in BP was also helped by a strong set of third-quarter results in October. The firm’s underlying replacement cost profit of $1.8bn was up by 38% from $1.3bn during the second quarter, beating analysts’ expectations.

BP shares have risen by 17% from their September lows. In my view they remain a strong long-term income buy.

Premier Farnell

Shares in this UK-based electronic component company are down by 42% in 2015. Two profit warnings in three months have shaken investors’ confidence and the dividend has already been cut.

However, the shares have fallen so far that even after a 40% cut to the interim dividend, Premier stock still offers a forecast yield of 6.8%. The firm still appears to be performing reasonably well, too.

An operating profit margin of 7.6% seems reasonable for a business of this kind, and the firm’s shares trade on just 8.8 times forecast earnings for the current year.

My only real concern is that Premier’s debt levels are a little too high for comfort. The group’s net debt of £237m is 2.3 times its earnings before interest, tax, depreciation and amortisation (EBITDA). That’s relatively high, in my view. Reducing this multiple could mean diverting cash from dividend payments to debt reduction. In my view this is one reason why the firm’s shares appear cheap.

In my view there is no rush to invest. There are certainly safer dividends elsewhere.

The post Will Foxtons Group PLC, BP plc & Premier Farnell plc Be Forced To Cut Their Dividends? 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. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

KAZ Minerals (LSE: KAZ) closed at 150p on Friday. It dropped to 139p on Monday, hitting 104p on Tuesday. It currently trades at 108p, but its high level of indebtedness could seriously jeopardise the value of your investment even at this price. Most financial metrics indicate that its current valuation — which stands at a 52-week low, and 60% below a one-year high of 280p — may not fully take into account a deteriorating cash position. Its net debt rose to $1.5bn at the end of June from $962m six months earlier, which implies a net leverage of 17x. 

Looking For Fair Value

Xcite Energy (LSE: XEL) closed at 23p on Friday. It dropped to about 20p on Tuesday, but has bounced back to 21.5p since. It currently trades close to a 52-week low of 19.75p, and some 65% below a one-year high of 63p — however, I am not too bearish based on fundamentals. This fossil fuel explorer is a different investment than KAZ, but one that is similarly exposed to the vagaries of the global economy. With oil prices at these levels for longer, it will find it difficult to deliver on its promises. It recently argued for a net present value “of the reserves for the Bentley field of about “$1.9bn, $2.3bn and $2.6bn on a 1P, 2P and 3P basis, respectively”. As the company acknowledges, that does not represent its fair market value.

A Risky Macro Play

Premier Oil (LSE: PMO) closed at 78p on Friday. It plunged to 64p on Tuesday, and currently trades at 66p, which is about 80% lower than a 52-week high of 343.5p. It said yesterday that production remained “ahead of full year guidance of 55 kboepd, before any contribution from Solan,” which indicates that if you are really bullish on the global economy you might not run the risk of losing a fortune investing in its shares at these levels. Still, its balance sheet carries too much debt based on its cash flow generation, so I’d be careful before snapping up its stock. It’s easy to argue that its brand new covenants remain tight, while capital requirements are significant. 

(If volatility subsides, KAZ, XEL and PMO will not necessarily rise as quickly as other companies whose fundamentals and business pipelines look more promising right now. Read on…)

Recovery 

The rise and fall in the valuation of Glencore (LSE: GLEN) has been spectacular in recent days and weeks. The shares traded around 130p on Friday, but they have plunged to a lowly 99p on Tuesday — hitting another record low. At its current valuation of 108p, its stock is dirt cheap based on most metrics, so a calculated bet would make sense. The risk is that its restructuring plan won’t work according to plans (some assumptions are very bullish, in my view) — hence, you are advised to hold GLEN only as part of a properly diversified portfolio.

The same applies to Premier Farnell (LSE: PFL), which issued a profit warning a week ago — but there are caveats. Since 17 September its stock has plunged from 133p to 100p: does its share price currently take into consideration the recovery potential of this electronics manufacturer? Citigroup today cut its price target from 140p to 90p, which is not terrible news. In fact, you’d be buying into a restructuring story for less than 10 times its forward earnings. PFL could be a nice alternative to any investment in the commodity sector: leverage is manageable, and the group is paying attention to working capital management — yet its price-to-book value signals risk…

The post Are Glencore PLC & Premier Farnell plc Set To Rise Quicker Than Xcite Energy Limited, Premier Oil PLC & KAZ Minerals PLC? appeared first on The Twelfth Magpie.

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Alessandro Pasetti 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.

Today’s results confirm that this has been the case, with adjusted operating profit being 10% lower than in the first half of last year. However, today’s update states that the difficult conditions from the first half of the year are now expected to continue into the second half of the year, which means that full-year adjusted operating profit is expected to be lower than previous guidance, with a figure of £73m to £77m now being given.

Clearly, this is hugely disappointing for investors in Premier Farnell. Furthermore, it means that dividends have been cut by over 40% and, with further challenges due in the short run, it would be of little surprise for them to be cut further. In fact, although Premier Farnell appears to have a sound strategy to turn its performance around, it seems likely that its share price will come under further pressure in the months ahead. As such, and while it is a stock worth watching, now may not be the opportune moment to buy.

Similarly, Premier Inn and Costa owner Whitbread (LSE: WTB) is also enduring a rather challenging period. This is due to the potential impact of the new living wage, which is set to negatively impact on the company’s performance moving forward. That’s because a large proportion of Whitbread’s employees are paid the minimum wage and, as a result, the company’s cost base will rise relatively quickly.

Whitbread has stated that it will increase prices to cope with the additional costs. While this sounds logical, the impact on demand is a known unknown. Certainly, Whitbread has a very good reputation, but its customers may be unwilling to pay higher prices without increases in service levels. As such, and while the company trades on a very appealing price to earnings growth (PEG) ratio of 1.3, there may be better moments for purchase over the medium term.

Meanwhile, BP (LSE: BP) has also endured a challenging period, with a lower oil price hurting its sales and margins. Clearly, its future performance is highly dependent upon the price of oil, but for investors who are willing to take a chance on a higher oil price further down the line, BP appears to be a very sound place to invest.

That’s at least partly because it continues to drive through efficiencies and put itself in a sound financial position to withstand a prolonged period of oil price weakness. This may cause BP’s position relative to its peers to improve – especially since it has a strong, diversified asset base. And, while dividends may be cut if profitability fails to improve, even a halving of BP’s dividend would leave it yielding a very enticing 3.8%. As such, a wide margin of safety appears to be on offer.

The post Are BP plc, Premier Farnell plc And Whitbread plc Set To Be Star Performers? appeared first on The Twelfth Magpie.

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Peter Stephens 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.

Cyclical risk

At a share price of 505p, international banking giant HSBC Holdings’ forward dividend yield runs at around 6.6% and City analysts following the firm expect forward earnings to cover the payout about 1.6 times. That sounds tempting. However, the shares have slipped around 30% since the beginning of 2010, meaning capital loss has taken back investor gains from dividend payments.  

HSBC Holdings is up against all the structural and regulatory issues facing other banks as well as volatility in its overseas markets. However, the biggest problem with a bank such as HSBC Holdings is its cyclicality. If the firm struggles to grow its business now during arguably benign macro-economic conditions, how will it fair when the next downturn arrives? It doesn’t take a great stretch of the imagination to see the dividend axed, or trimmed back, and the share price 50% lower than it is today.

Banks come with so many hard-to-predict risks, and they are so cyclical, that avoiding them completely gives me a much better chance of achieving good stock-market returns.

Stagnant

When dividend yields get too high they tend to serve as a warning rather than an attraction, and that’s what I see with FTSE 250 constituent Premier Farnell. At today’s 134p share price the firm expects to pay a 7.8% dividend yield relating to the 2016 trading year. That looks good at first sight, but forward earnings will likely cover the payout just 1.3 times, which suggests the firm could be struggling to pay the dividend, to me. Premier Farnell also finds it hard to grow the payout, which by next year will have been essentially flat for at least six years.

Earnings have been slipping for around five years. The firm describes itself as a global leader in the high service distribution of technology products and solutions. Judging by the company’s financial performance that can’t be an easy business to be in. Like HSBC Holdings, if the company can’t thrive now while the macro-economic weather is mild whatever will happen when the next economic hoolie blows up? 

Fierce competition

You’ve probably heard of Esure Group’s brands such as Sheilas’ Wheels, Gocompare and Esure itself. The UK-focused personal insurer operates in the motor and home insurance markets, both of which are competitive to the point of being cutthroat.

Right now, Esure’s combined operating ratio runs around 96%, which means the firm makes underwriting profit (anything below 100% indicates that). However, the next insurance premium price war could be lurking just ahead. City analysts expect Esure’s earnings to decline 7% this year and to rebound by 5% during 2016. That’s uninspiring for what seems like something of a purple patch in the macro-economic landscape.

However, the biggest risk with Esure is that insurance firms tend to behave like other financials such as banks. They are cyclical, and we never know when the next profit, share price and dividend plunge will occur. Viewed like that, today’s 6.1% forward dividend yield loses its shine. Forward earnings cover 2016’s payout around 1.3 times, which makes the dividend look fragile given the challenges of the insurance sector.

HSBC Holdings, Premier Farnell and Esure Holdings don’t cut it for me and I’m not trusting their dividends.

The post Why I’m Resisting Temptation To Buy Big Dividend Payers HSBC Holdings plc, Premier Farnell plc And Esure Group plc appeared first on The Twelfth Magpie.

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To try and help investors from cashing unsustainable dividend yield, investment bank Société Générale publishes a monthly list of “high dividend risk companies” across developed markets.

Firms that make it onto the list have a dividend yield of 4% or more and a lower-than-average Merton score — a measure of credit risk and financial stability. This month Premier Farnell (LSE: PFL) and Glencore (LSE: GLEN) top the list, while Fresnillo (LSE: FRES) tops the bank’s list of the most overvalued UK companies. 

Dividend jeopardy 

Premier Farnell supports a dividend yield of around 8% at present and trades at a forward P/E of 9.5. Traditionally, Premier has paid out the majority of its profits to shareholders. The company’s dividend cover ratio has averaged 1.2 for the past five years. Nevertheless, Premier’s earnings have collapsed by around 40% since 2012 and management issued another profit warning during June. As Premier restructures to improve profitability, management could be forced to axe the dividend to save cash. 

Glencore is under severe pressure to slash its dividend payout and key the cash for debt repayments. City analysts are becoming extremely concerned about the company’s $50bn debt pile. If commodity prices don’t recover soon, Glencore could find itself being forced to sell off assets to repay creditors. Even though Glencore’s dividend yield of 9% may be the best in the FTSE 100, it should be avoided — it might not be around for long!

Société Générale believes that Fresnillo should be avoided as it is one of the most overvalued companies trading on the London market. The company currently trades at a forward P/E of 55, making it one of the most expensive companies in the metals and mining sector. What’s more, Fresnillo also looks expensive on price to sales, price to book and EV to EBITDA ratios. 

Dividend champions 

Investors should avoid Premier, Glencore and Fresnillo. But Société Générale believes that Persimmon (LSE: PSN) and Pearson (LSE: PSON) are two of London’s best income stocks. Using a similar method to the high dividend risk screen mentioned above, Société Générale’s models show that Pearson and Persimmon’s dividend yields are well covered by earnings and the two companies have solid balance sheets, which can withstand sudden shocks.

According to City forecasts, Persimmon’s shares will support a yield of 5.3% next year, and the payout will be covered 1.5 times by earnings per share. Pearson currently supports a yield of 4.9%. 

Moreover, both companies have cash-rich balance sheets with low levels of gearing. Pearson’s net gearing is 42%, and Persimmon has a net cash balance of £272m.

The post Are These Dividends At Risk? Premier Farnell plc, Glencore PLC, Fresnillo Plc, Persimmon plc And Pearson plc appeared first on The Twelfth Magpie.

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

Only for the adventurous

Anglo American (LSE: AAL) currently trades at a forward P/E of 12.3 and the shares support a dividend yield of 7.1%, so the company looks attractive on a valuation basis.

However, Anglo is struggling with a high level of debt and falling commodity prices. There’s no telling how much lower commodity prices could fall, and further declines could inhibit Anglo’s ability to pay down debt, finance its dividend and cover interest costs. That said, Anglo is taking drastic action to cut costs, targeting $1.5bn per annum of cost savings over the next 18 months.

So, for the adventurous investor, Anglo could be a high-risk play on the recovering commodity market, but there are better investments out there. 

Better opportunities

If you’re searching for value in the oil sector, Premier Oil (LSE: PMO) should be avoided. That said, if you already own Premier there’s no reason to sell up just yet.

The company recently reported first-half results that showed operating cash flow of $513m over the six months and a $214.7m pre-tax loss triggered by a $385m write-down.

Still, while Premier is generating cash and growing production, other oil explorers such as Genel Energy could prove be better bets on the oil market as they have stronger balance sheets and lower production costs.

Struggling

Premier Farnell (LSE: PFL) just can’t seem to get things right. Between 2011 and 2014 the company’s revenue has contracted by 3% and net profit has contracted by a third as margins come under pressure. Management has reacted by trying to cut costs, but costs aren’t falling fast enough.

Premier Farnell issued another a profit warning at the end of July and management has announced yet another review of the group’s operations.  

Premier Farnell may look cheap as it currently trades at a forward P/E of 9 and supports a dividend yield of 8.4%, but the company could be a value trap.

Wasting cash  

EVRAZ (LSE: EVR) surprised the market earlier this year when the company announced a $375m stock buyback after cutting debt and boosting profit. What’s more, the company announced that it had a strong positive cash flow and the liquidity to meet payment deadlines on its debt for the next two years.

But steel prices have fallen by around a quarter since EVRAZ announced this cash return. EVRAZ will now need as much cash as possible to maintain a certain degree of financial flexibility in a volatile and uncertain market.

EVRAZ could find itself in a sticky position now that it has returned $375m to investors. Management might have wasted shareholder cash by buying back stock. 

Trouble ahead

There’s no other way of putting it, Lonmin (LSE: LMI) is in trouble. The world’s third-largest platinum miner has half a billion dollars of finance facilities coming up for renewal next year and has no cash to meet obligations.

Management is currently working with banks on a possible debt refinancing or restructuring. However, lenders’ patience is likely to be running thin as Lonmin was granted $300m of debt relief back in 2012. Lonmin could end up becoming another Afren. 

The post 5 Falling Knives To Avoid: Anglo American plc, EVRAZ plc, Premier Farnell plc, Lonmin Plc & Premier Oil PLC appeared first on The Twelfth Magpie.

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

LGO Energy‘s (LSE: LGO) operational update confirmed the presence of recoverable hydrocarbons at its latest development well, GY-676, in its Goudron Field development in Trinidad. As some wells near depletion, group oil production in the second quarter of 2015 fell to an average of just 951 barrels of oil per day (bopd), down from 1,550 bopd in the preceding quarter. But this decline in production should be temporary, as new wells are currently being drilled and three new wells have already been started production in June. Shares in LGO Energy fell 9% to 1.60 pence at the time of writing.

Shares in LGO Energy have already benefited from a series of positive news flows concerning its production outlook and its low cost of production, and it seems that much of this anticipated production growth has already been priced into its share price. With so much optimism surrounding the stock, I cannot help but worry about what further production delays would do to its share price.

Premier Farnell

Shares in electronics group Premier Farnell (LSE: PFL) fell 15% to 141 pence at the time of writing, following the announcement of a downbeat trading update today. Year-on-year sales growth in the second quarter of 2015 is expected to have slowed to just 1.2%, down from 5.4% in the first quarter. Supply constraints for the Raspberry Pi were cited as a major factor for the slowing revenues, but there also seems to be a slowdown in its core North American and the UK markets.

Management now expects adjusted operating profit in the first half of 2015 will be approximately 10% lower than the previous year. Analysts had previously expected Premier Farnell would turnaround its trend of stagnant revenues and declining profitability by this year, but it appears that the company’s recovery has not yet taken hold. Unless there are signs that the recovery could be sustained, investors will probably be better off avoiding Premier Farnell’s shares.

St James’s Place

St James’s Place‘s (LSE: STJ) half-yearly report seemed to confirm that the momentum of growing client funds is continuing. It saw strong net inflows of funds under management of £2.7 billion in the first half of 2015. The asset manager also announced today that it had agreed to buy Bristol private wealth manager and broker Rowan Dartington for £34 million.

On a more downbeat note, its half-year pre-tax profits fell 6.9% to £72.9 million. Much of this was due to the unexpected increase in the Financial Services Compensation Scheme levy, which took out an additional £13.1 million from its operating profits.

As the trend of cash net inflows is more important to the company’s long-term financial health than the temporary dip in earnings, St James’s Place could still be worth a buy as a long-term holding.

Lancashire Holdings

Shares in Lancashire Holdings (LSE: LRE) fell 4.6% to 640 pence by morning trading, as investors became concerned about intensifying competition in the specialty insurance markets. Lancashire benefited from a paucity of major catastrophe losses, but it suffered some substantial losses in the offshore energy, aviation and space lines of insurance. The insurer’s combined ratio fell from 70.6% in the same period last year to 75.1% in the first half of 2015.

As a conservative underwriter, Lancashire has been willing to see its net premiums written fall 43% to £284.3 million. But despite underwriting so much less risk and suffering from some unexpected insurance claims, Lancashire is still very profitable and continues to have an industry leading combined ratio. Adjusted EPS for the first half of 2015 fell just 15% to $0.46. With a forward P/E of 11.8, shares in Lancashire Holdings are still very attractive.

The post Should You Buy LGO Energy plc, Premier Farnell plc, St. James’s Place plc & Lancashire Holdings Limited After Today’s Updates? appeared first on The Twelfth Magpie.

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Jack Tang 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.