Petra Diamonds (LSE: PDL), Diageo (LSE: DGE) and Persimmon (LSE: PSN) were amongst the fallers on the LSE this morning.
Each company highlighted areas of concern that could affect future results — but are any of these shares a buy at today’s prices?
Petra Diamonds
Diamond miner Petra dug out a profit warning for shareholders this morning, sending its shares down by around 11%.
Full-year earnings per share are now expected to be below consensus forecasts of $0.17, and total production is expected to be 3.2m carats, down from previous guidance of 3.3m carats.
Despite this, the firm did confirm that it will begin paying a dividend this year, with an initial payout of 2p per share planned, giving a prospective yield of 1.2%.
Petra said that while the diamond prices had stabilised during the third quarter, the quality and size of its diamonds had fallen, mainly as a result of a lot of the firm’s production being sourced from mature mining areas, while new areas are prepared for mining.
Petra could be a buy at today’s prices, but there is a risk of further disappointment.
Diageo
Shares in the global liqueur giant fell by 3% when markets opened this morning, before recovering slightly. The cause of the disappointment was a nine-month trading statement, showing that sales fell by 0.7% during the third quarter, during which modest growth had been expected.
Emerging markets remain the big problem for Diageo: during the third quarter, sales fell by 10.2% in Latin America and the Caribbean and by 6.0% in the Asia Pacific region.
Analysts may now reduce their full-year profit forecasts slightly, but for now, Diageo trades on a 2015 forecast P/E of 21, which looks ample, to me.
Persimmon
Housebuilder Persimmon issued an upbeat trading statement this morning, highlighting a 6% increase in its weekly rate of sales, and a 7% increase in forward sales revenue, which rose to £2.0bn during the first quarter, including completions.
Despite this, the firm highlighted several potential headwinds.
Planning approvals for new sites are being delayed ahead of May’s general election, while a new programme to recruit and train tradespeople leaving the UK armed forces suggests to me that labour costs are likely to be rising, as the supply of skilled tradespeople is clearly limited.
After dropping sharply when the market opened, Persimmon shares have risen and are down by 1% as I write.
In my view today’s news is already reflected in the share price, and the shares remain a hold.
