Electronics revival

The story of the old Dixons was a remarkable one of turnaround from the brink of disaster, and since its rebirth as Dixons Carphone (LSE: DC) we’ve seen a decent performance. Dixons shares have gained 39% over the past two years to 443p, and the company’s dividend has been creeping up slowly.

For the year ended April 2016, the forecast dividend would only yield a modest 2.2% on today’s share price, but it would represent an inflation-smashing rise of 26% on the previous year and there are big boosts on the cards for the next two years. The firm’s fourth-quarter trading update told us to expect headline pre-tax profit of between £445m and £450m, after revenues grew by 5% in the final quarter and over the 12 months. Net debt should below £300, which is really nothing at all to be worried about.

What about the value of the shares? The latest P/E of 15.6 might seem a little high, but that would drop to 12.6 by April 2018 if forecasts prove accurate, and I see that as fair value for a company with decent growth expectations even if it’s perhaps not a screaming bargain. Full-year results are due on 29 June.

Cash in on housing

Before that, on 15 June, we’re due full-year results from housebuilder Berkeley Group Holdings (LSE: BKG). The City’s analysts are expecting a standstill in earnings for this year to put the 3,302p shares on a P/E of around 12.7, which might not sound too thrilling. But a 50% EPS forecast for the year to April 2017 would drop that to just 8.4, and there are dividend yields of 6% on the cards.

In its last update in March, Berkeley told us that the London market was stable and that it had “cash due on forward sales remaining in excess of £3 billion“, although reservations were down 4% on the previous year at that point. But the company did predict “£2 billion of pre-tax profit in aggregate over the three years culminating in 2017/18” and said that results should be at the top end of expectations.

Fears for a slowdown or even a reversal in London house prices have helped show share price growth, and we’re looking at a rise of just 6% in the past 12 months. But with expectations so strong, I’d say rumours of a demise in the housebuilding sector are very much exaggerated.

Oil & gas bargain?

On 30 June we should see a trading and operational update from Tullow Oil (LSE: TLW), ahead of first-half results due on 27 July. Tullow oil shares have picked up 84% since their low on 20 January, trading now at 232p, and that is in no small part due to the recovery in the oil price to above $50 per barrel.

Tullow is one of those mid-sized oil companies that carry a lot of debt, but which at least do have profits on the cards to service it. And while that makes the firm riskier than the likes of BP and Shell, it’s way ahead of the unprofitable tiddlers in the safety stakes. Despite that, Tullow shares are still down 85% since their peak in early 2012, and you’d have had very little in the way of dividends since then.

But the tide looks like turning, and now could be a great time to buy Tullow Oil shares.

The post 3 hot dates for June: Tullow Oil plc, Dixons Carphone plc, Berkeley Group Holdings plc appeared first on The Twelfth Magpie.

More reading

• Up 3.5% this month, is it time for UK investors to cycle back into the more domestically-focused FTSE 250 index?

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

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

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

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

No more paper?

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

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

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

Change of focus

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

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

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

and told us the firm has exceeded its targets.

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

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

More reading

• Why Barclays shares could have a huge second half of 2026
• Back below 500p, is it time to consider BP shares again?
• Is there any value left in Lloyds shares now they’re over £1?
• How much would I need in a Stocks and Shares ISA to target £19,036 a year in second income?
• After huge new nuclear deals, are Rolls-Royce’s sub-£15 shares set to power higher?

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.