Today, I’m highlighting two examples I believe are likely to make their owners considerably richer, so long as they’re prepared to buy and hold. 

5G ready

FTSE 250 constituent Spirent (LSE: SPT) provides communications testing and connectivity kit to more than 1,500 customers around the globe in sectors as diverse as defence, healthcare, and financial services. It’s a leader in what it does and, right now, business is good.

Earlier this month, the company reported a “strong” performance over the first half of the year, despite some impact from the coronavirus. Order intake and revenue were up 6% and 7% respectively. A “material increase” in adjusted operating profit from $20.7m last year to $39.5m in 2020 was also booked. Cue a sharp rise in Spirent’s share price.

At 27 times earnings, this company’s now far from cheap. Then again, great stocks are rarely without friends for long. Indicatively, the company ticks the boxes for rising margins and returns on capital. It’s in solid financial shape with oodles of cash on the balance sheet. Although unlikely to attract income hunters, the 12% hike to the interim dividend also suggests confidence on the part of management.

By far, the most interesting part of the investment case for me is the company’s exposure to the 5G market. The fact that many organisations will turn to Spirent for support when it comes to deploying infrastructure and related equipment makes me think those buying this tech share now could be richly rewarded later down the line.

Booming tech share

Fellow FTSE 250 member Kainos (LSE: KNOS) is another stock worth backing, in my view. The IT consulting and software solutions provider is ideally placed to take advantage of a growing demand for ‘digital transformations’ as a result of the coronavirus pandemic.

Reflecting the recent boom in business, Kainos now expects full-year revenue will come in “well ahead” of previous expectations. Adjusted profit will also be “substantially ahead” of forecasts, thanks to demand from its near-400 customers around the world.

Another bit of good news was the 6.7p per share special dividend. This goes some way to making up for the lack of final payout from the previous year (which coincided with the coronavirus outbreak). The cherry on the cake was the announcement that cash returns would now carry on as usual. 

Naturally, all this hasn’t gone unnoticed by investors. Having soared 130% since March’s market crash, Kainos’s shares now sit on a valuation of 51 times forecast earnings. It may be that they now pause for breath. After all, the company still can’t estimate the impact Covid-19 will have on its customers. 

Like Spirent, however, Kainos has all the things I look for in a ‘buy and hold’ investment. Earnings are nicely diversified by customer and geography. Returns on capital employed are consistently high too. At the time of its update, the firm also held cash of more than £62m and zero debt. 

All told, I think Kainos is one to tuck away for a few years. Should markets crash again, I’ll be backing up the truck.

The post Have £2,000? Here are 2 FTSE tech shares I’d buy and hold for the next decade appeared first on The Twelfth Magpie.

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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Paul Summers has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended Alphabet (A shares), Amazon, Apple, and Microsoft. The Motley Fool UK has recommended Kainos and recommends the following options: long January 2021 $85 calls on Microsoft, short January 2021 $115 calls on Microsoft, short January 2022 $1940 calls on Amazon, and long January 2022 $1920 calls on Amazon. 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.

To try and solve this problem, I’ve selected two companies that provide essential services to the markets they serve. This is similar to the ‘picks and shovels’ approach favoured by some mining investors — you don’t know which miners will strike gold, but you do know that they’ll all need the same tools.

To make sure both companies still have some room to grow, I’ve chosen them from the mid-cap FTSE 250 index, rather than the big-cap FTSE 100. But I’ve also chosen companies that are already fairly large, with good market share and solid finances.

Testing is guaranteed

I think we can be certain that mobile and wired communication networks will continue to be an essential part of modern life. That’s why my first pick is FTSE 250 firm Spirent Communications (LSE: SPT).

This £930m company specialises in providing testing, assurance, security and analytics services for network operators. Customers include mobile networks, corporate IT departments and the automotive sector.

In my view, this business that can only become more essential as network technology continues to develop. I think the main challenge for Spirent is simply to make sure it stays in tune with changing requirements. So far, the company has managed well. Major areas of demand at the moment include 5G mobile network assurance, Gigabit Ethernet testing and GPS positioning products.

The shares trade on 18 times 2019 forecast earnings and offer a 2.6% dividend yield. That’s not cheap, but Spirent enjoys double-digit profit margins and ended last year with $121m of net cash — roughly two years’ profits.

I think there’s a chance Spirent will be acquired at some point in the future. But if it isn’t, then I expect it to continue the profitable expansion we’ve seen in recent years.

Beat the property cycle

Property is one of the oldest business sectors around, but it’s heavily prone to boom and bust cycles. That’s not ideal for a long-term investment. To get around this, I’ve selected a firm that’s exposed to more than one geographical market and more than one type of property.

The company I’ve chosen is Savills (LSE: SVS). This 160-year-old business describes itself as an “international real estate advisor.” I’d call it an estate agent or property broker, but it’s fair to say the company does a lot more than this too.

One attraction for me is that the firm is active in both residential and commercial property. Savills also tends to operate at the upper end of the market, which typically bounces back from recessions more quickly.

Only half the group’s profits come from the UK. Last year, nearly 40% of its £144m underlying profit came from the Asia Pacific region, with the remainder split between North America and the Rest of the World.

The shares haven’t escaped the general nervousness surrounding the UK property market. But they’ve done better than many locally-focused rivals and have only fallen about 5% over the last year. Trading on 12 times forecast earnings and with a well-supported 3.6% dividend yield, I think Savills could be a good long-term buy.

The post 2 FTSE 250 dividend stocks I’d buy and hold until retirement appeared first on The Twelfth Magpie.

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Roland Head 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.

I wasn’t previously familiar with quantum dots. They’re “fluorescent semiconductor nanoparticles” that are typically around 1/1000th the width of a human hair. They absorb energy from light and re-emit the colour in a different colour. They can be used in LCD displays such as computer monitors and televisions to provide vivid, bright colours.

Unfortunately many quantum dots contain cadmium, which is a heavy metal that’s apparently a proven carcinogen. Regulatory pressure to reduce the use of heavy metals in electronics is growing, so Nanoco has focused on developing cadmium-free quantum dots. I’d imagine that demand for this technology could rise rapidly, if it’s commercially successful.

About to hit the big time?

Nanoco published its half-year results this morning. The group reported good progress on several fronts. The company now has “an increasing number of Nanoco-equipped display products moving through to commercial production with customers in Asia”.

The first commercial products using the firm’s technology are expected to reach the market in 2018, so the company could soon start to receive revenue for commercial sales. Analysts expect the group to make a loss of £6.4m on £6.1m of revenue in 2018. In 2019, Nanoco is expected to make a profit of £12.4m on £24.1m of revenue.

To bridge the gap before sales revenue is expected to start flowing, Nanoco completed an £8.6m fundraising in October. Based on the firm’s H1 cash burn of £4.5m, I believe this could be enough to see the business through to break-even.

Should you buy Nanoco?

Consensus forecasts for 2019 put the firm’s shares on a forecast P/E of 15. That seems quite modest, but it’s worth remembering that we don’t yet know how well Nanoco products will sell in the market.

This is too speculative for me, but if you’re comfortable with the risk, I’d continue to hold the shares following today’s figures.

One stock I would buy

I prefer to invest in companies that are already profitable and delivering sustainable growth. One of my favoured stocks in the tech sector is network technology testing and analytics group Spirent Communications (LSE: SPT).

The group’s recent full-year results showed that 2017 was a successful year, despite some customer delays in the US. Adjusted operating profit rose by 27% to $58.9m, while adjusted earnings were 43% higher, at 7.55 cents per share.

Adjusted operating costs were cut by $16.7m, which helped to lift operating margins to 13% and double free cash flow to $56.4m.

Looking ahead at 2018, the outlook remains strong. Consensus forecasts suggest that the group’s earnings will rise by 10% to 8.3 cents per share this year, and then by a further 20% to 10 cents in 2019.

These projections put the stock on a 2018 forecast P/E of 21. The group’s dividend policy suggests to me that a payout of about 4 cents per share is likely this year, giving the stock a forecast yield of around 2.2%.

This isn’t a cheap stock, but it’s one I’d be happy to buy for long-term growth. However, Spirent’s share price has been quite volatile over the last few years. I suspect the best trading strategy here is to buy on the dips.

The post 2 growth stocks that could crush the FTSE 100 in 2018 appeared first on The Twelfth Magpie.

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• 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?

Roland Head 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.

Spirent Communications (LSE: SPT) has seen its share value go gangbusters on Thursday following the release of brilliant full-year financial details.

The stock was last up 10% on the day and dealing at levels not seen since last July. I reckon there is plenty left in the tank too, for further share price advances.

Spirent — which supplies testing and performance analysis services to the communications sector — announced that, although revenues fell marginally in 2017 to $454.8m from $457.9m a year earlier, adjusted pre-tax profit leapt 34% over the period to $59.2m.

The small-cap noted that the profits jump of last year was delivered “by materially reducing costs and focusing on our core areas of differentiation,” and the rosy result, helped by strong cash generation (free cash flow more than doubled to $56.4m) encouraged it to shell out a maiden special dividend of 5 cents on top of an ordinary dividend of 4.08 cents.

Growth star

Now a quick disclaimer: while Spirent is likely to see earnings growth cool considerably in the near term — City consensus suggests only a fractional year-on-year improvement is set for 2018 as legacy headwinds continue — I am convinced that the communications colossus is in great shape to deliver brilliant bottom line progress over the long term.

Indeed, the number crunchers are predicting that earnings expansion will pick up the pace again with a 14% advance next year, helped by an anticipated rebound in demand for high-speed ethernet from the current period.

Demand for Spirent’s services is only likely to grow as communications providers look to deliver data connectivity that is quicker, has greater capacity and is more secure. And the company’s renewed focus on what it sees as key growth areas bodes well for future revenues, too. Revenues from Lifecycle Service Assurance and Application Security rose 10% and 20% respectively last year.

The tech star may change hands on an elevated P/E ratio of 22 times, but in my opinion Spirent’s strong position in a rapidly-growing marketplace makes it worthy of such a premium.

Fasten in. Listen up

Trifast (LSE: TRI) is another little-known stock with the capacity to deliver exceptional shareholder returns.

City analysts are expecting the fastenings manufacturer to deliver a 23% earnings rise in the year to March 2018, although profits growth is expected to slow thereafter with a 3% advance forecast for fiscal 2019.

Neither this predicted slowdown — nor a slightly-heady P/E multiple of 19.1 times for the upcoming year — would be enough to discourage me from investing, however.

Trifast’s progress is relentless and a slew of positive trading releases, including the strong third-quarter update unveiled last month, has seen brokers upgrading their profits forecasts with no little regularity.

The chances of yet more upward revisions are strong given the progress it is making across all its territories (sales in the emerging nations of Asia boomed 10.7% during April-September, for example) as well as the strength of key markets like the automotive industry. And what’s more, Trifast’s drive to build  its manufacturing and warehousing capacity across the globe bodes well for its ability to continue meeting the needs of the world’s biggest OEMs.

The post 2 secret stocks expected to deliver super earnings growth appeared first on The Twelfth Magpie.

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• 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.

It provides testing and performance analysis technology to the communications industry, and that’s a profitable business. And though earnings have been erratic over the past few years, the dividend has been growing steadily.

The share price shed 4.5% on Thursday morning, despite first-half adjusted operating profit climbing by 67% to $17.4m and adjusted EPS putting on 86%.

Perhaps unchanged revenue figures or the interim dividend being pegged at 1.68 cents caused some disappointment, but I’m very encouraged to see free cash flow more than doubling to $28.7m.

Although the exit of some non-core product lines, plus delays in Ethernet testing, mean that revenue should be flat, full-year profit expectations remain unchanged, according to chief executive Eric Hutchinson.

Solid growth

That suggests the analysts’ consensus for a 29% rise in earnings for 2017 is on the ball, with a further 15% currently suggested for 2018. The share price has climbed over the past year, to 116p, giving us a forward P/E of 22 (dropping to 19 for 2018), and there’s been some boost based on takeover rumours.

But with growth set to continue (and a PEG of a modest 0.8), I see that as a decent valuation for a growth share. But more to the point, I think above-inflation dividend rises should take the currently-expected 2.5% yield to something very attractive in the coming years.

With cover by earnings set to grow even faster, and Spirent throwing off lots of cash, I really do see a future dividend star in the making here.

Under pressure

I wish I could say the same for Inmarsat (LSE: ISAT), but my confidence in the satellite communications firm’s dividend is waning.

We’re looking at mooted yields of better than 5.5% this year and next, but the pressure is building as EPS is expected to drop by 30% leaving dividend cash badly uncovered — and even an 18% EPS recovery indicated for 2018 would still leave cover at only 90%.

Though first-half revenue rose by 9.4%, largely due to contracts with various governments, adjusted profit after tax dropped by 10.3%. And the share price dropped by 3.3% to 762p in early trading as a result.

I am convinced that Inmarsat has a healthy long-term future, being one of the world leaders in its field (and with very high barrier to entry — satellites don’t come cheap), but the medium term looks like it could be erratic.

Volatility to come?

The firm said that “whilst we have delivered a robust performance in recent quarters, our markets remain challenging and the outlook continues to be difficult to predict,” and there are uncertainties over shorter-term government business.

Inmarsat did raise its interim dividend by 5% to 21.62 cents per share which would suggest confidence in its viability, and a scrip scheme introduced in 2016 should take some pressure off the demand for cash. 

But at this stage, with a forward P/E of 22 while earnings are expected to fall, I just see this as a risky bet for those looking for reliable progressive dividends — and Inmarsat is not a buy for me right now.

The post One dividend star I’d buy today, and one I’d sell appeared first on The Twelfth Magpie.

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• 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. 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 Crawley firm has seen its share price accelerate as speculation that it could be a takeover target has hit fever pitch. Indeed, Spirent hit record tops above 125p per share just today after analysts at Citi lauded the quality of the tech play’s business and favourable exposure to end markets.

And it is easy to see why Spirent — which provides testing services for broadband and 4G networks — could attract advances from potential suitors.

While Spirent saw revenues increasing 4% during January-March, to $106.4m, sales at its Networks & Security arm soared 23%, crushing expectations as demand for its high-speed Ethernet products grew. And the terrific reception to recently-launched offers like CyberFlood and SecurityLabs suggests that sales should keep rocketing higher.

City brokers expect Spirent to wave goodbye to the earnings volatility of recent years and print a 29% earnings advance in 2017, following on from last year’s more modest 6% rise. And a further 16% increase is chalked in for 2018.

And in my opinion, Spirent provides excellent value for money based on these projections. Sure, a forward P/E ratio of 23.7 times may sail above the widely-regarded value yardstick of 15 times. But a PEG readout of 0.8 (below the bargain benchmark of one) actually suggests the tech titan is priced attractively relative to its growth prospects.

I reckon Spirent could prove a wise long-term investment as global telecommunications investment steadily grows.

Chemical fix

Like Spirent, the number crunchers also expect Treatt (LSE: TET) to enjoy breakneck bottom-line growth in the years ahead.

The chemicals play — which produces flavour, fragrance and cosmetic ingredients — announced this week that revenues climbed 27% during October-March, to £51.8m, a result that pushed adjusted pre-tax profit 63% higher to £5.5m.

And in a promising update on recent trading, chief executive Daemmon Reeve commented that “the strong performance… has continued into the third quarter with group order books remaining materially higher than this time last year as the benefit of some significant new business wins continues to show through.”

Following a similarly-spectacular February trading statement, Treatt has seen its share price scream 63% higher in 2017 and top out at a new all-time peak around 420p per share just today. However, I reckon the business still provides very-decent value at current prices.

In the year to September 2017 Treatt is predicted to churn out a 44% earnings advance, and to follow this up with a 5% rise in fiscal 2018.

The Bury St Edmunds business deals on a forward P/E ratio of 22.6 times, as a result, or a mere PEG reading of 0.5 times. Given the prospect of earnings upgrades as sales boom across the globe (sales in China exploded 43% in the half year, for example), I reckon Treatt is a great growth selection at current prices.

The post 2 super growth stocks that could help you retire rich 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.

Cash cow

Shares in Burberry have fallen this week after the company announced that total revenues slipped 1% at constant currencies during the six months to the end of March. That was on the back of a shrinking US market and Burberry’s “destocking” of its beauty range as it prepares for a new licensing partnership with cosmetics group Coty.

However, despite this marginal decline in revenue, the group remains a cash machine. For the six months to September 30 2016, the company generated a free cash flow of £75m, in a seasonally weak half. Burberry usually produces the majority of its earnings in the second fiscal half, which covers the crucial Christmas trading period. For example, for the year ending March 31, 2016, the group produced a free cash flow of £273m. With almost no debt and cash of around £700m, management can return all of the cash the company generates from operations to investors. Dividends will cost the company approximately £170m this fiscal year and to speed up cash returns management is also repurchasing stock. 

Shares in Burberry only yield 2.1% at present but the payout is well covered by earnings per share (1.9 times), and with so much cash on the company’s books, it looks as if the dividend will be safe even in an economic downturn. Put simply, even though Burberry may not look like a dividend champion at first glance, the company’s cash generation, rock solid balance sheet and high dividend cover are all indications that this is one dividend stock that won’t let you down. 

If Burberry continues at its current pace, buying the shares for income today should produce impressive results in five to 10 years time. 

Hidden dividends

Like Burberry, Spirent Communications (LSE: SPT) does not look like a dividend champion at first glance. Shares in the company currently support a dividend yield of 2.5%, and the payout is only just covered by earnings per share. However, over the next three years, City analysts expect the company’s earnings per share to grow by 42% and the dividend by almost 20%. 

What’s more, like Burberry, Spirent is a cash cow. Over the past five years, the company has generated an average free cash flow per annum of $39.4m and paid $24m per annum in dividends to shareholders. The firm has no debt and nearly $100m in cash. 

If Spirent continues on its current course, within a few years, the firm will be a dividend champion and buying today will allow you to profit from the company’s rise. The shares may not look cheap at 28 times forward earnings, but dividend growth will more than make up for the lofty valuation in the years ahead. 

The post These 2 dividend aristocrats are bargains appeared first on The Twelfth Magpie.

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Rupert Hargreaves has no position in any shares mentioned. The Motley Fool UK has recommended Burberry. 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.

All looking good

Headline figures for Nichols include revenue up 7.4% compared to a year ago, an operating profit rise of 9% and adjusted earnings per share ticking 9.7% higher. That all looks good, but the best figure of all is the directors’ hiking of the full-year dividend by 15.3%. I think that move speaks volumes about the how they see the health of the business and its prospects.

After reflecting on “another very good year”, non-executive chairman John Nichols said he expects the firm’s clear strategy for growth to overcome challenging soft drinks markets during 2017. His confidence is underpinned by the company’s strong brands, diversification and successful track record of growth.

Those all-important brands include names such as Vimto, Panda, Sunkist, Levi Roots and Feel Good Drinks. As well as diversity of brands, the firm has sales diversified across markets with Vimto, for example, selling in more than 85 countries. Meanwhile, its track record of growth speaks for itself.

I can’t argue with the progress shown in that table and Nichols’ return on capital running around 7% adds to the impression of a quality enterprise on offer. But as with all quality items, you have to pay up for the shares. At today’s 1,700p, Nichols trades on a forward price-to-earnings (P/E) ratio of just under 23 for 2018. Does that matter so much? As long as I can remember, Nichols has looked expensive, but that hasn’t stopped a 486% increase in the share price since the beginning of 2010.

And Spirent also ran…

Although revenue is down 4% at Spirent Communications, adjusted operating profit rose 10% and the adjusted figure for earnings per share elevated by 5.8%. When it came to the dividend though, the directors chose to leave the payout unchanged from the year before, suggesting a note of caution over proceedings, in my view.

Chief executive Eric Hutchinson reckons the company is focusing on the themes of exponential growth in data, the virtualisation of networks and assurance against cyber security threats. Several competitive contract wins in the period and market share gains demonstrate Spirent Communications’ good positioning for future growth, he argues.

Its trading record leading up to today’s results looks like this.

The table shows cash flow struggling to grow and the dividend clinging to a level first achieved in 2014. Meanwhile, the firm’s return on capital is less impressive than Nichols’ return on capital, running at just 3.4% or so. At 104p, Spirent’s forward P/E rating sits around 19 for 2018, which strikes me as a little elevated.

I’m more worried about Spirent’s forward stock progress after today’s results than I am about that of Nichols.

The post What FY results mean for Nichols plc and Spirent Communications 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?

Kevin Godbold 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.

Storming gold miner

With market fears herding investors towards gold, the shiny stuff is up to $1,349 per ounce, giving gold miners a nice boost. As a result, Russia-based Petropavlovsk (LSE: POG) is one of today’s biggest climbers, with its shares up 6% to 7.7p.

The share price had been falling since early May, with the firm’s disappointing first-half fall in production exacerbating the slide — but a recovery in the past few weeks has resulted in an overall 48% boost since January’s low point. So is the share one to buy now?

Well, a rescue package in early 2015 effectively wiped out shareholders, and that left the company still with significant debt, which stood at $598m at the first-half stage. Debt’s falling, but only by $12m since December, and it’s a lot for a company with a market cap of around $335m. Petropavlovsk’s mines are high quality, but healthy finances do depend on gold strength continuing, and it all looks too risky to me.

Telecoms prospect

Shares in Spirent Communications (LSE: SPT) dipped sharply in morning trading, but they’ve picked up a bit to stand 1% down at 87.8p just after noon. Spirent, which provides analysis services to the telecoms industry, reported a 2.4% drop in first-half revenue to $213.5m, but it swung a $2.3m pre-tax loss at the same stage last year to a $2m profit. Adjusted earnings per share rose 64% to 1.13 cents and the interim dividend was maintained at 1.68 cents per share.

Spirent has suffered a few years of falling earnings, but there are modest rises predicted for this year and next (of 5% and 16% respectively), so we could be looking at a nice recovery pick. I’m a bit concerned that P/Es are a little high at around 20 and that the forecast dividends (yielding more than 3%) would only just be covered by earnings — but the company was sitting on net cash of $96.1m at the halfway stage, and that provides a nice safety net.

The delivery chain

We had full-year results from Clipper Logistics (LSE: CLG) today, and they gave the shares a 4.5% boost to 287p. The logistics firm reported a 23.7% rise in revenue to £290.3m, with adjusted earnings per share up 22.6% to 10.2p — enabling a 25% hike in the full-year dividend to 6p per share.

Clipper, which provides delivery management services to the retail business, has seen its shares climb by 144% since its stock market flotation in June 2014, but the price has been pretty flat over the past 12 months. We’ve now seen two years of strongly rising earnings per share, and analysts have a further 30% forecast for the year to April 2017, so we’re looking at a likely growth share here.

But a forward P/E of 21 now, together with a marginal PEG of 0.7, suggests to me that the early share price rise was a tad too optimistic. I’d say the shares are just about fair value now, and though it’s a good company, I see better medium-term opportunities out there.

The post Should you buy these three big movers today? appeared first on The Twelfth Magpie.

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

The earnings guidance is in line with current market forecasts and suggests underlying earnings of about 39p per share are likely this year. This puts BAE Systems on a modest forecast P/E of 12.3, with a forecast yield of 4.5%.

In my view this could be a smart time to buy. Defence spending in the US, UK and Middle East appears to be stable and recovering from the cutbacks of recent years. BAE’s sales are expected to rise by 8% this year.

The firm’s forecast earnings of 39p per share provide a decent level of cover for the expected dividend of 21.4p per share. I’m confident that the 2016 payout should be safe and believe these shares are an excellent bet for long-term income.

I believe that BAE’s scale and its diversity — the firm’s activities range from shipbuilding to cyber security — are likely to result in a profitable long-term future.

Big scale may cut costs

Scale and diversity are also attractions at Standard Life (LSE: SL), which announced the acquisition of Axa’s UK advisory business this morning. You may know the firm concerned as Elevate — it provides financial advice for around 160,000 UK savings and investment customers.

The Elevate deal will add £9.8bn of assets under administration and increase Standard Life’s UK advisory customer base by 84% to 350,000. The deal will deliver “significant benefits”, according to the firm.

Standard Life isn’t just dependent on its UK business, however. Last year, two thirds of the group’s net inflows of new funds came from overseas. Strong growth was reported in Europe, India and China.

The group’s shares have fallen by 32% over the last year. In my view the stock now looks quite cheap, on a forecast P/E of 12 and with a prospective dividend yield of 6.3%. This translates into a forecast dividend payout of 20.1p per share, which should be adequately covered by forecast earnings of 26.7p per share. Now could be a good time to buy more, for dividend investors.

Testing times for tech firm

FTSE small cap firm Spirent Communications (LSE: SPT) rose by 4% this morning, after the group said that sales rose by 6.3% during the first quarter. Adjusted operating profit rose to $1.8m, a considerable improvement on last year’s $3.6m operating loss.

Spirent makes testing systems for mobile phone networks. After a difficult few years, caused by changing customer requirements and low spending, profits are expected to bounce back this year.

Broker forecasts suggest that Spirent’s adjusted earnings will rise by 63% to 5.8 cents per share. The firm’s shares currently trade on a 2016 forecast P/E of 21. This doesn’t look cheap, but Spirent also offers an attractive 3.4% forecast yield which should be covered by free cash flow.

You may also be interested to note that nearly 15% of Spirent’s market value is covered by its $102m net cash balance. This is a well-financed firm with a good history of cash generation and dividends.

Spirent may well be worth a closer look following today’s news.

The post Are BAE Systems plc, Standard Life plc & Spirent Communications plc a buy after today’s updates? appeared first on The Twelfth Magpie.

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Roland Head owns shares of BAE Systems. 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.