Monitise
There seems to be little for investors in mobile payments solutions provider Monitise (LSE: MONI) to shout about at the moment. Shares in the company are down a further 4.7% today (having fallen by 51% this year), although there has been no significant news flow to prompt such a fall.
Indeed, it seems as though even the rumoured bid from IBM and the promise of profitability in 2016 is not enough to improve sentiment in Monitise, with the uncertainty surrounding major customer and shareholder, Visa, still hanging over the company.
Clearly, it has huge future potential and banks such as RBS seem to be very keen to adopt its technology. However, whether Monitise can ever become a highly profitable and sustainable business when many of its customers have the resources to ‘go it alone’ could hold shares back for a good while yet. As such, it may be best to wait for further news flow and results before buying a slice of Monitise.
Halfords
Despite releasing very upbeat first half results today, shares in Halfords (LSE: HFD) are down 5% today. That’s partly because they have enjoyed strong recent performance and, with operating cost forecasts rising from 4.5% to 5.5% for the full year, there seems to have been some profit taking.
Over a longer period, though, Halfords has considerable potential. That’s because it is performing well, with total sales up 6.8% in the first half of the year and pre-tax profit rising by 10.8%, with particular strength from cycle sales of +16%. In fact, Halfords has decided to respond to the strength of cycle sales by opening specialist bike shops called Cycle Republic, mainly in London, where the company lacks a significant store footprint.
With shares in the company trading on a price to earnings growth (PEG) ratio of 1.3, they seem to offer growth at a reasonable price and, if Cycle Republic does take off, then Halfords could prove to be a top performer over the medium term.
Promethean World
Shares in Promethean World (LSE: PRW) are down by 5% today after the company lowered guidance for its full year EBITDA by £2 million. However, that may prove to be good news over the medium term, since Promethean has decided to invest heavily in the sales and marketing of its cloud based teaching platform, ClassFlow, which it feels will be beneficial to profitability in future periods.
Furthermore, Promethean World has maintained its full year sales guidance, with its software division continuing to progress in-line with expectations, although year to date revenue is down year-on-year by 12% excluding currency impacts.
However, with Promethean World being a loss-making entity, and expected to continue to be so next year, sentiment could weaken further as the patience of investors is tested. Although reinvestment for long term gain is often worthwhile, there could be more short term pain in the form of further falls in its share price.
