The contracts for difference (or CFD) provider was recently up 13% from last week’s close and dealing at levels not seen since late September.

Plus 500 advised that revenues exploded 19% during January-June, to $188.4m, a result that saw net profit more than double to $90.7m.

These record half-time results were “significantly ahead of expectations,” the Israel-based business advised, and it was helped by an 8% rise in the number of customers to an all-time high of 112,317. The company attributed this to its retention initiatives as well as successful marketing campaigns.

The spreadbetting star saw the number of new customers gallop 43% higher year-on-year in the first half, to 31,671.

And in further good news, the business added that trading in the third quarter “has continued to be strong,” and that it is “currently on track to significantly exceed prior market expectations for 2017.”

Trading titan

The City had been expecting earnings at Plus 500 to hurtle 16% lower in 2017, although I believe today’s spectacular numbers should prompt a weighty upgrade to such forecasts.

And such a scenario should make the business a much hotter value pick than it is already. Plus 500 deals on a forward P/E ratio of 11.2 times even after today’s share price charge, well under the widely-regarded value benchmark of 15 times.

There is plenty for dividend chasers to get excited about too. The number crunchers expect a total ordinary dividend of around 61.2 US cents per share, roughly matching last year’s levels and creating a stonking 6.4% yield.

While it still faces some regulatory uncertainty,  I reckon Plus 500 is a steal at these prices considering its stunning momentum, and expect the huge investment it has made in improving its trade platforms — as well as boosting its marketing activity — to keep driving business.

Drive away

I am not so optimistic over the earnings, and thus dividend, outlook over at Pendragon (LSE: PDG) as pressure on car shoppers’ wallets mounts.

Data from the Society of Motor Manufacturers and Traders last week showed car sales in Britain topple for the fourth successive month in July. New registrations dropped 9.3% year-on-year last month, to 161,997. This meant that sales in the first seven months of 2017 had fallen 2.2% to some 1.56m units.

Against this backcloth the City expects earnings at Pendragon to decline fractionally in 2017, breaking its long-running record of bottom-line advances. Still, this results in a forward P/E ratio of just 8.4 times.

Dividend chasers could also be forgiven for smacking their lips too, a predicted 1.5p per share reward yielding a handsome 4.6%.

I for one won’t be tempted to invest any time soon, however, with sales indicators for big-ticket items like cars continuing to worsen. Indeed, Visa’s latest Consumer Spending Index released on Monday showed spending fall 0.8% in July. This meant sales have fallen for the third consecutive month for the first time since February 2013.

With the UK’s economy sliding, and political instability likely to persist for some time yet, I reckon now could prove a dangerous time to pile into the likes of Pendragon.

The post Why I’d buy mega-cheap dividend stock Plus500 Ltd today appeared first on The Twelfth Magpie.

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Royston Wild has no position in any shares mentioned. The Motley Fool UK has recommended Pendragon. 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.

Online fridges

Shares in online household appliance retailer AO World (LSE: AO) are down 45% over the past 12 months to 130p, but that hides a bigger story — since they peaked at 336p back in February, we’ve seen a 61% loss! A downbeat trading update on 24 February kicked off the slump, signalling the all-too-familiar ending of a bubble based on hype rather than cold hard cash.

It happens all the time, when a high-flying growth punt fails to exceed initial expectations — the early gamblers leap off the bandwagon and rush to find the next hot thing. But has the fall abated? The problem with a “jam tomorrow” stock like this is that it’s impossible to quantify. Forecasts suggest a tiny profit by March 2016 with something more substantial in 2017, but that’s all just guesswork right now and still puts the shares on a high valuation. And I just don’t see the barriers to entry that would place AO World above the general online marketplace.

New ways to pay?

Mobile payments firm Monitise (LSE: MONI) has suffered an even bigger fall, with its shares down 87% since their high of February 2014, to just 6.9p apiece today. The latest blow came from Visa Inc, which is dumping its shares in the company — Visa’s commercial deal with Monitise runs out in March 2016, and I wouldn’t be betting on the contract being renewed.

Monitise has been burning cash for years and has failed to meet early expectations, and the City’s analysts aren’t forecasting any profits before 2017 at the earliest — even though the company now says it should turn in a profit on an EBITDA basis in 2016. But this is another unquantifiable prospect right now, and if you invest in Monitise today you’ll be taking on a large helping of risk.

Aerospace

But how about a company with a long and proud track record, which has fallen on hard times of late? I’m talking of Rolls-Royce (LSE: RR)(NASDAQOTH:RYCEY.US), which has shocked the markets with a string of profit warnings, the latest just a few days ago. The result has been a 36% fall in the share price in two and a half years to 764p, with a 2015 recovery faltering as the shares have dropped 28% since a recent peak at the end of April.

But Rolls-Royce actually makes stuff, and there is still serious long-term demand from the commercial aviation business — with the long-haul and widebody jet markets tied up by Rolls and GE Aviation, there aren’t going to be any upstart competitors appearing any time soon. Rolls-Royce is the only one of these three that I’d consider buying.

The post How Much Further Can AO World PLC, Monitise Plc And Rolls-Royce Holding PLC Fall? appeared first on The Twelfth Magpie.

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

Monitise’s shares have fallen by 18.4% at pixel time as investors weigh up the fact that Monitise is about to lose one of its most important partners. 

Visa Europe owns 5.3% of Monitise’s issued share capital and is planning to reduce this shareholding over the few months while working out the remainder of its current commercial agreement with Monitise. 

Monitise and Visa Europe will continue to work together on a number of projects under a three-year commercial agreement, which runs until the end of March 2016. 

Time to panic?

Visa’s announcement that it is planning to sell off its Monitise stake shouldn’t come as a surprise to investors. This move has been in the works since September of last year. 

However, what’s more concerning is the fact that Monitise now stands to lose a key partner. If Visa decides not to renew the commercial agreement with Monitise when it ends, Monitise’s long-term growth targets could be in jeopardy.

Of course, as of yet, it’s not possible to tell if the relationship between Monitise and Visa will last past 2016. Nevertheless, the one thing that the market dislikes more than anything else is uncertainty, and right now, Monitise’s future is extremely uncertain. 

Missed targets

Unfortunately, Monitise has a history of missing targets and misleading shareholders. Since it came to market in 2007, the group has failed to generate a profit and has burnt through cash at an alarming rate. 

Specifically, during the five years from 2010 Monitise has spent £160m with little to show for it. The group has also raised more than £300m through share placings during this period. 

Still, according to the group’s latest trading update, the first under new CEO Elizabeth Buse, it seems as if Monitise is finally starting to get its house in order. For example, Monitise expects that operating and capital expenses during the second half of 2015 will be materially lower than those reported during H1.

That said, the company’s full-year 2015 revenue is now expected to come in below the target announced at the beginning of the year by approximately 10%. Moreover, cash burn has continued. Monitise’s cash balance has declined by 32% to £89m since the end of January. 

Nevertheless, the group still expects to be profitable on an earnings before interest, tax, amortization and depreciation basis by 2016. 

Bright spots 

Overall, there’s no denying that Monitise’s position is precarious. However, the company does have some friends in the form of Santander, one of the Eurozone’s largest lenders, and IBM, one of the world’s largest technology companies. 

And as I’ve covered before, these two partnership could be extremely valuable for Monitise. Also, there’s a chance that Santander could make an offer for the company. 

So, while today’s announcement is concerning, it’s not time to panic. Monitise has plenty of other options open to it. 

The post Monitise Plc Slides On Visa Inc’s News But Should Investors Be Worried? appeared first on The Twelfth Magpie.

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Rupert Hargreaves owns shares of International Business Machines. The Motley Fool UK owns shares of Monitise. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.