Today I am looking three of the movers and shakers in midweek business.
Low & Bonar
I believe that prolonged share price weakness at textiles manufacturer Low & Bonar (LSE: LWB) provides an excellent buying opportunity for value investors. Although the business is currently dealing 9.4% higher in Wednesday trading, the share price has surrendered almost 40% of its value since hitting record peaks of 95p per share just under a year ago.
Although earnings are anticipated to have dropped for a second consecutive year in 2014, Low & Bonar is predicted to get the bottom line moving again from this year as internal restructuring takes hold, recent purchases are fully integrated, and expansion into key Asian marketplaces rolls on. Indeed, City analysts expect the business to record increases to the tune of 4% and 11% in fiscal 2015 and 2016 respectively.
Consequently, the company deals on P/E ratings of just 9 times and 8.1 times forward earnings for these years, comfortably below the watermark of 10 times which marks terrific value for money.
And Low & Bonar’s relative cheapness should also make it a bountiful selection for dividend hunters, with decent earnings growth helping to drive the full-year payout from 2.7p per share last year to 2.81p in 2015 and 3.06p next year. Consequently a yield of 5.5% for this year leaps to a lip-smacking 6% for 2016.
Moss Bros Group
Suit house Moss Bros (LSE: MOSB) has emerged as one of the laggards in Wednesday business and was recently 3.7% weaker on the day. I fail to share this weak investor sentiment, however, and expect the successful introduction of sub-ranges like Moss Esquire, combined with the fruits of extensive store refitting and surging online trade, to underpin strong revenues growth.
Moss Bros’ recovery in recent years is expected to screech to a halt for the year concluding January 2015, with the number crunchers anticipating a 11% bottom line slide. But the clothes outfitter is anticipated to bounce back from this year, and growth of 24% for 2016 is expected to roll an extra 20% higher next year.
Consequently the company’s P/E rating of 20.8 times for this year collapses to 16.8 times for 2017, and the business’ exceptional price relative to its earnings prospects are underlined by PEG readings of just 0.8 times through to the close of next year — any reading below 1 is widely considered splendid value.
On top of this, Moss Bros’ progressive dividend policy is expected to push the total payout from 5.25p per share for the year just passed to 5.55p in 2016 and 5.6p in 2017. As a consequence the retailer carries market-bashing yields of 6.6% and 6.7% for these years.
Tullow Oil
Despite a perky uptick in recent days, shares in fossil fuel explorer Tullow Oil (LSE: TLW) maintain their relentless march lower and were recently 6.1% lower in today’s session. And with good reason: prices have lost more than half of their value since oil prices started to splutter last June, and with the supply/demand balance looking murky at best I expect prices to continue careering lower.
The company advised in January that it was slashing its exploration capital expenditure budget for 2015 to just $200m, and follows a cutback to just $300m announced just two months before. And worryingly Tullow Oil warned that further reductions could be in the pipeline as crude prices keep on sliding.
City analysts expect the business see revenues slump from an expected $1.46bn last year to $1.19bn in 2015, before bouncing back to $1.49bn in 2016. But as conditions in the oil market continue to deteriorate, and the profitability of work across its promising East African assets come into question, Tullow Oil could continue to witness prolonged difficulties.
