SVG’s NAV per share has risen by 12% in the last six months and this takes its increase for the last year to 21%. This was boosted by the performance of its investment portfolio, with it recording a total return of 13% during the six-month period. Its core investment portfolio, which represents over 50% of the portfolio, performed well and the overall appeal of the business remains strong, as evidenced by the unsolicited final offer from HarbourVest Bidco.

The offer is viewed as too low by the board of SVG, which has advised its shareholders to wait for other offers. In fact, SVG states in today’s update that it has received approaches from a number of credible parties and this could lead to a higher offer than that which is currently on the table.

SVG continues to have a strong balance sheet and good coverage of its uncalled commitments. It trades at a substantial discount to its NAV, with SVG having a price-to-book (P/B) ratio of just 0.93. This indicates that its shares could rise significantly over the long run – especially since they have a price-to-earnings (P/E) ratio of only 9.5.

Overvalued shares?

This valuation compares favourably to that of sector peer Hargreaves Lansdown. It trades on a P/E ratio of 34.2 and this indicates that its shares are overvalued. The company offers a high degree of stability and has been able to increase its earnings in four of the last five years. This compares favourably with SVG’s performance over the same timeframe. SVG was lossmaking in two of the last five years and its profitability has been highly volatile.

However, with Hargreaves Lansdown’s earnings due to rise by just 6% in the current financial year, it’s  difficult to justify the current rating. That’s especially the case when SVG has a P/E ratio of just over a quarter of Hargreaves Lansdown’s.

SVG also has clear bid potential. Although there’s no guarantee that further bids will be forthcoming, the strength of its business model and the performance of its portfolio indicate that bids are likely. That’s particularly true because of SVG’s management’s confidence in recommending a rejection of the current bid from HarbourVest Bidco.

In comparison, Hargreaves Lansdown is an unlikely bid target due to its high valuation and UK focus at a time when Brexit is a real concern for investors, while SVG has exposure to a number of funds that operate across the globe. This provides it with greater diversification than Hargreaves Lansdown. When combined with its lower valuation and bid potential, this makes it a superior buy than its financial services sector peer.

The post Will this financial services company outperform Hargreaves Lansdown plc? appeared first on The Twelfth Magpie.

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

Toast brilliant returns

Shares in Enterprise Inns (LSE: ETI) have exploded 8% in Tuesday trade following the release of bubbly trading numbers.

The pub operator advised that like-for-like sales advanced 1.5% in the leased and tenanted estate division during the six months to March 19th. As a consequence, Enterprise Inns said that it remains on track to meet its expectations for the full year.

And following today’s solid results, Enterprise Inns announced plans to embark on a £25m share buyback programme.

The City expects Enterprise Inns to flip from a 1% earnings dip in the year to September 2016 with a 2% advance in the following period. These figures create mega-low P/E ratios of 4.3 times and 4.2 times correspondingly, very decent value in my opinion given the solid momentum of the firm’s growth strategy.

A capital selection

Investor appetite for SVG Capital (LSE: SVI) also bumped higher in today’s session, the business last dealing 3% higher from Monday’s close.

SVG Capital advised that net asset values surged by double-digit percentages for the sixth year on the spin in the year to January 2016. Net asset values improved 11% from the previous year, the company advised, compared with a 5% slide in the FTSE 350.

Looking ahead, however, chief executive Lynn Fordham advised that “the year ahead is likely to present a number of macroeconomic, geopolitical and financial market challenges and we expect volatility to continue.”

The number crunchers expect these problems to push earnings 41% lower in the current period, resulting in a P/E rating of 16.1 times. But a predicted 74% earnings advance in 2018 drives the multiple to just 9.3 times.

Given that SVG Capital has already proved it has what it takes to succeed despite heavy macroeconomic turbulence, I reckon the business could once again surprise to the upside this year and beyond. The investment specialists could prove a canny purchase for stock pickers with the right appetite for risk, in my opinion.

Mammoth risks at current prices

Precious metals play Fresnillo (LSE: FRES) has also leapt in Tuesday business on the back of rising gold and silver values, the business last dealing 3% higher on the day.

Fresnillo has seen earnings dip for four years on the bounce as metal prices have eroded. But earnings are expected to surge 237% and 120% in 2016 and 2017 respectively, according to the City, the result of recent commodity price improvements and vast cost-cutting at the firm.

However, these estimates still leave Fresnillo dealing on massive P/E multiples of 58.9 times and 29.3 times respectively.

I believe that these figures fail to reflect the huge risks facing the business in the near-term and beyond. Silver demand continues to steadily decline, while the prospect of a resurgent US dollar also casts doubt on the strength of precious metal price advances. I believe the risks at Fresnillo continue to outweigh the potential rewards.

The post Is NOW The Time To Buy Fresnillo Plc, Enterprise Inns plc & SVG Capital plc? 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.