Highlights in today’s half-year report include revenue almost 25% higher than a year ago, underlying operating profit moving up 11% and a decline of just over 40% in the firm’s net debt figure on the balance sheet. The directors pushed up the interim dividend almost 5% in a sign of confidence in the outlook.

Acquisitive growth

Earnings per share declined by almost 12%, but I don’t think that’s anything to worry about. Last year, a deferred tax credit flattered the earnings result and this year the share count is a little higher because of a £10m capital raising event in March. The company wanted the money to move forward with its acquisition programme and reports five completed during 2017 so far and 11 since first listing on the stock market in 2014.

The directors reckon they are “confident” of completing more acquisition deals in the second half of the year, which is encouraging because the firm has become a consolidator in the fragmented fluid power sector. I reckon such a strategy could lead to a critical mass of business that leads to an irresistible offering for Flowtech’s customers, based on an efficient and lower-cost distribution service.

Organic progress

Acquisitive growth in the UK, Ireland and continental Europe is running alongside good organic progress, and City analysts following the firm expect earnings to advance 36% this year and 12% during 2018. Meanwhile, at today’s 134p share price, the forward price-to-earnings (P/E) ratio for 2018 sits just below nine and the forward dividend yield at almost 4.6%. Those forward earnings should cover the payout around two-and-a-half times. Assuming that Europe’s economies are not about to fall off a cliff, I think these indicators represent good value.

Over at Servelec Group (LSE: SERV), yesterday’s interim results report sent the shares into a bit of a tail spin and at 240p, the price is around 16% lower than it was at the end of last week. The UK-based technology firm provides software, hardware and services to the UK healthcare, local government, nuclear, power, utilities, oil and gas sectors, but as you might have guessed, there’s a problem.

Positive long-term outlook

Chief executive Alan Stubbs tells us in the report that a deferment in customer demand in its technologies division, and in the power and infrastructure segment of its controls division, will likely affect short-term progress. But he assures us that the health and social care division, and the oil and gas segment of the controls division, are performing well and he is positive about the longer-term prospects of the company.

Such short-term challenges in an otherwise decent long-term story can spell opportunity for us investors and the first-half numbers show us the firm’s potential when things are going well. Compared to a year ago, revenue lifted 11%, adjusted diluted earnings per share rose 45%, and the firm’s net debt figure declined by a healthy-looking 54%. The directors indicated their ongoing confidence in the bigger-picture outlook by pushing up the dividend by 21%. I think Servelec is interesting right now and one to keep a close eye on.

The post 2 ‘under the radar’ growth and income shares appeared first on The Twelfth Magpie.

More reading

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

Kevin Godbold has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

The specialist non-life legacy insurance investor advised that pre-tax profit galloped to £5.4m in January-June from £1.2m in the same 2016 period, with a £19.1m contribution from legacy transactions proving critical in driving the bottom line.

Celebrating the results, chairman and chief executive Ken Randall said: “I am pleased to report that the Group delivered a very strong performance during the first half of the year. It is the Board’s view, especially given the advanced state of a number of other legacy transactions and the growing pipeline that the results for the full year will be at least in line with expectations, absent unforeseen circumstances. ”

And Randall added that “the outlook for the Group beyond the current year remains very promising.” The firm’s head specifically pointed out that its ongoing programme to simplify the business, following the recent disposals of its Lloyd’s Managing Agency and Triton divisions, still has some way to go.

A great all-rounder

Current City forecasts certainly suggest that Randall & Quilter is worth checking out right now. The company is expected to record a 61% earnings increase in 2017, resulting in a forward P/E ratio of 7.8 times, which falls under the broadly-considered bargain watermark of 10 times.

Furthermore, a corresponding sub-1 PEG readout, at 0.1, underlines the investment giant’s brilliant value in relation to its growth potential.

And Randall & Quilter would appear to be a terrific all-rounder given that the number crunchers are also predicting juicy dividends in the near-term at least. In 2017 the business is expected to pay an 8.6 per share dividend, resulting in a market-mashing 5.9% yield.

IT master

Servelec Group (LSE: SERV) is another London-quoted stock that should deliver pleasing returns for both income and growth seekers, at least if current analyst projections are anything to go by.

In 2017 the company is expected to generate a 22% earnings increase, creating a delectable forward P/E ratio of 14.2 times as well as a PEG multiple of 0.6. And the Sheffield-based business is expected to keep this uptrend going with a 9% bottom line increase next year.

As I already said, Servelec provides plenty to get excited about on the dividend front too. An estimated 6p per share payout, if realised, would mark a decent upgrade on 2016’s 5.65p dividend and yields a chunky 2.1%. And the yield stomps to 2.3% for next year, thanks to a predicted 6.4p reward.

The IT services provider returned to profits growth in the first half of 2017, the vast sums it had ploughed into product development helping to drive orders once again and to rebuild relationships with its previous clients. And with conditions across many of its key markets also improving, I reckon Servelec could be about to deliver a period of sustained earnings growth.

The post 2 excellently valued stocks for growth and income hunters appeared first on The Twelfth Magpie.

More reading

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

Royston Wild has no position in any 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.

While enduring no little earnings turbulence in recent times, the IT services star is expected to rise to greatness with a 20% bottom-line advance in 2017. And the good news does not stop here, an 8% charge is also forecast for next year.

These projections make Servelec a brilliant bargain, in my opinion. Not only does the company’s forward P/E ratio clock in at 15 times — bang on the widely-regarded value watermark — but the Sheffield firm also carries a cheap sub-1 PEG ratio of 0.8.

Software star

Tough market conditions have caused Servelec plenty of headache in recent times, a 3% earnings decline in 2016 forcing pre-tax profit to clatter 29% lower to £9.5m.

But the tech giant has been engaged in ambitious restructuring to help it recover from tough trading conditions. As well as continuing to hike investment in product development (Servelec shelled out £5.2m last year alone), the Yorkshire firm has also been busy on the acquisition front. It gobbled up Synergy and Abacus last spring to bolster the social care and education aspects of its HSC division.

And it is confident that sales should return to growth from this year as its key markets improve. Business at its Automation division has ticked higher again more recently, the firm advising that significant contract wins helped drive sales higher during the fourth quarter of 2016.

And revenues at HSC should benefit from system upgrades in the social care market that should drive procurement activity, Servelec recently announced. Furthermore, “sales of our mobile solutions and the digital transformation of the NHS in the community, mental health and child health sectors” provide additional opportunities, it believes.

With cost-cutting also moving through the gears, I believe it could be on the verge of delivering brilliant earnings expansion.

Bullion beauty

I also believe a case could be made that Shanta Gold (LSE: SHG) is grossly undervalued by the market.

The Tanzania-focused digger is expected to deliver a 60% earnings rise in 2017, and to follow this up with a 22% advance the following year.

Consequently Shanta deals on a mere forward P/E ratio of 3.7 times with anything below 10 times, on paper at least, generally classified as unmissable value. And the company’s PEG reading comes out at just 0.1.

It provided the market with a reassuring update in late April over the progress at its New Luika underground project, with work there continuing on time and within budget, the company advised.

Output is anticipated to fall from the 20,416 ounces of material dug during January-March in the second quarter due to the switch underground, resulting in between 80,000 ounces and 85,000 ounces of material in 2017, down from the record of 87,713 ounces set last year).

But in the long term, Shanta’s new underground operations could pave the way for stunning earnings growth with first ore pulled from the ground in recent days. Looking ahead, that growth could come as I expect) safe-haven demand for precious metals to remain strong.

The post These growth shares could be dealing below true value appeared first on The Twelfth Magpie.

More reading

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

Royston Wild has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.

Technology services

Servelec (LSE: SERV) provides software, hardware and related services across a wide range of industrial sectors, including healthcare, education, oil and gas, utilities, broadcast, and rail.

Things were going swimmingly until 15 June last year, when the company issued a profit warning and told us it was going to fall short of its 2016 expectations. The shares slumped by 32% to 237p on the day, although they have since recovered, and currently stand at 280p, on the day the preliminary results were released.

The results were in line with revised expectations, and showed a 29% fall in pre-tax profit from continuing operations, leading to an 11% fall in adjusted EPS. But the full-year dividend was lifted by 10% to 5.65p per share, and signs of recovery were starting to show. Highlights include a strengthening order book, the company’s automation business recovering “on the back of significant project wins“, and several acquisitions being made.

Chairman Richard Last said that the “situation around procurement delays, noted in our trading update in June 2016, has improved and we are optimistic that Servelec will return to growth in 2017“, and the City’s analysts appear supportive with a 20% rise in EPS penciled in for this year followed by a further 9% in 2018.

The dividend is expected to keep on rising ahead of inflation, and though it’s set to yield only a little over 2%, it should be very well covered by forecast earnings.

It’s often suggested that profit warnings come in threes, but I don’t see that here and I think Servelec is on the happy road to recovery.

Treble whammy

The first warning from St Ives (LSE: SIV) came in April 2016, telling us that “the outlook for the final quarter, and for the following financial year, has deteriorated“. Then the printing and marketing services firm added in January that its pursuit of new business was “taking longer than previously anticipated” and that we will not see “full benefit of the new work we have won until the final quarter of the current financial year“.

If that wasn’t enough, in February we heard that a contract with HarperCollins will not be renewed when it ends in June. That’s three bits of bad news, and three hits to the shares, which are now trading at 52.5p — but at least the firm’s first-half results haven’t done any further damage.

In fact, I think the worst is probably over and I see St Ives’ recovery efforts as starting to bear fruit. The firm stressed the importance of its Strategic Marketing business, with chief executive Matt Armitage speaking of “a number of exciting new projects being won from existing and new clients” and telling us he is confident of its long-term growth.

Mr Armitage added that the firm is considering options for its Marketing Activation and its Books segments, so we could see something drastic there in the coming months and that might cause a little more share price volatility.

But with forecasts putting the shares on a forward P/E of only 3.9 for this year and 4.3 next, I see more pessimism built into the share price than is deserved. I see a risky but potentially profitable recovery investment.

The post 2 small-cap stocks headed for profitable recovery appeared first on The Twelfth Magpie.

More reading

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

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.

With Jimmy Choo on track to deliver cost savings and efficiencies, the outlook for its margins is upbeat. It’s expected to record a rise in earnings of 26% in the current year, followed by further growth of 20% next year. This puts Jimmy Choo on a price-to-earnings growth (PEG) ratio of just 0.7, which indicates that now could be a good time to buy it.

Upside potential

Also rising today are shares in Severfield (LSE: SFR), with the structural steelwork specialist soaring by over 11%. That’s due to it releasing an upbeat set of results for the year to 31 March, with sales up by 19% and underlying profit before tax increasing by 59% as operational improvements and efficiencies delivered over the last three years have begun to have an impact.

Looking ahead, Severfield is expected to increase its bottom line by 26% in the current year and by a further 22% next year. This has the potential to improve investor sentiment in the stock and with Severfield trading on a PEG ratio of only 0.4, there’s considerable upside potential on offer.

Profit warning

Meanwhile, falling heavily today are shares in Servelec (LSE: SERV), with the technology and software group recording a decline in its valuation of 34%. This is due to a profit warning, with Servelec having previously expected a heavier weighting towards the second half of the year than had historically been the case. However, given further slippage in contracts Servelec now expects to miss guidance for the full year.

With Servelec trading on a price-to-earnings (P/E) ratio of 15.4 prior to today’s update, its shares were already relatively expensive. While they’re now clearly much cheaper, there could be further falls to come in the short run as investors take stock of today’s update. Therefore, it may be prudent to avoid their purchase at the present time.

Gains reversed

Also falling today are shares in Aveva (LSE: AVV). The technology company is down by 12% after it announced that it’s no longer in talks with Schneider Electric regarding a potential combination between the two companies. Clearly, this is somewhat disappointing for Aveva and means that the gains following the news that talks were taking place have now been reversed.

Looking ahead, Aveva remains a business that’s struggling to deliver improved performance and with its profitability likely to come under further pressure over the medium term, there seem to be better options elsewhere within the technology space for long-term investors.

The post Are Jimmy Choo plc, Servelec Group plc, Aveva Group plc and Severfield plc ‘buys’ after today’s updates? appeared first on The Twelfth Magpie.

More reading

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

Peter Stephens owns shares of Jimmy Choo. 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.

Limited upside

Looking ahead, Helical Bar is expected to deliver rapidly rising profitability in the next two years. For example, its bottom line is due to rise by 97% in the 2017 financial year and by a further 36% in the 2018 financial year. This puts it on a forward price to earnings (P/E) ratio of 26.9, which indicates that its shares are richly valued at the present time. So, while the company may be starting a much more profitable era, its shares seem to offer limited upside. Therefore, other property companies may be better buys at the present time.

Also releasing significant news today was UK-based technology group Servelec (LSE: SERV). It has agreed to buy Tribal’s Synergy unit for £20.25m in cash, which will provide the company with growth opportunities as local authorities begin to take responsibility for children’s community health in the coming years. And with Servelec also announcing the award of multiple contracts for its technologies division from utility companies, it appears to be on the road to rising profitability.

Encouraging progress

Furthermore, Servelec’s results (also released today) show that the company is making encouraging progress. For example, revenue increased by 22% in 2015, while earnings per share soared by 25%. And with the company’s bottom line forecast to rise by 12% this year and by a further 14% next year, Servelec seems to be a strong growth play which could continue its share price rise of 15% over the last year. With its shares trading on a price to earnings growth (PEG) ratio of 1.1, it seems to offer excellent value for money, too.

Meanwhile, industrial fuel cell power company AFC Energy (LSE: AFC) is also at the start of what could prove to be a new era. After a successful 2015, it today announced eight new milestones which it is aiming to achieve during the course of 2016. They include the development of a second generation fuel cell stack and Balance of Plant during the second half of the year, as well as the conclusion of the basic design and engineering on a single cartridge 10kW system and a 1MW capacity fuel cell system. In addition, AFC Energy is seeking to commence scoping studies for at least three international fuel cell projects and secure contracts for at least two of them.

A whirlwind year

The news, however, has not been well-received by the market and AFC Energy’s shares have fallen by around 16%. Part of the reason for this fall could be a perceived delay regarding the company’s progress after such a whirlwind 2015 which saw the company’s shares rise from around 10p at the start of the year to reach 58p by July.

However, with AFC Energy continuing to make solid progress towards its goals and setting out a clear strategy for the next twelve months, it continues to be worth a closer look for less risk averse, long term investors. That’s especially the case with cleaner energy likely to become a more important industry in the coming years.

The post Is This The Start Of A New Era For AFC Energy plc, Helical Bar plc And Servelec Group PLC? appeared first on The Twelfth Magpie.

More reading

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

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.

However, with Bango experiencing faster than expected growth in developing markets, its end user spend margin was lower at 1.8%. The company expects further growth in end user spend during 2016 from its newer markets, where smartphone adoption is still increasing. And with its switch to recurring fees from upfront platform fees likely to have a positive impact on end user spend, it appears to be relatively well-positioned to continue its growth.

With Bango having a low fixed cost base, it has the capacity to process in excess of 10 times the current end user spend. It believes that it has a clear path to profitability and while it could prove to be a strong long-term performer, it looks set to remain highly volatile and risky during an uncertain period for the wider market.

Giant leap

Meanwhile, software specialist Fusionex (LSE: FXI) is also down by 16% today despite releasing results that are ahead of expectations. For example, revenue leapt by 35% versus the prior year, while net profit jumped by 28% versus the prior period. A key reason for such strong growth is the expansion of its partner network, with over 30% of its revenue coming from this space. And with Fusionex also reporting better than expected performance from its flagship big data product GIANT, as well as further investment in the product, it remains highly confident in its long-term future.

With Fusionex expected to grow its bottom line by 11% in the current year, it continues to offer upbeat near-term prospects. However, when the company’s valuation is taken into account, it appears as though its growth potential is already factored into its share price. For example, Fusionex trades on a price-to-earnings growth (PEG) ratio of 3.7, which indicates that it lacks appeal at the present time.

Improving operations

Also reporting today is software and hardware provider Servelec (LSE: SERV). It finished 2015 with a strong order book, improving pipeline and increased cash position versus the prior year, with its performance being relatively resilient despite challenges in the oil and gas markets. In fact, its health and social care division helped to offset softer performance from its automation unit, which experienced a slower than expected increase in sales for the year.

Looking ahead, Servelec expects the delayed projects in the oil and gas space from 2015 to boost its automation division’s performance this year, while its health and social care unit continues to offer a robust outlook. This is set to lead to a rise in earnings of 11% in the current year and with Servelec trading on a PEG ratio of just 1.5, it appears to be a relatively appealing buy for the long term.

Clearly, its shares are likely to be volatile due to the company’s exposure to the oil and gas industry. But for long term, less risk-averse investors Servelec could hold significant appeal.

The post 3 Small-Cap Tech Stocks To Beat The Market Crash? Bango plc, Fusionex International PLC And Servelec Group PLC appeared first on The Twelfth Magpie.

More reading

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

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.