Are Genel Energy plc, ITE Group plc and Findel plc 3 must-have small-caps?

Should you buy Genel Energy plc (LON: GENL), ITE Group plc (LON: ITE) and Findel plc (LON: FDL) right now?

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Today’s half-year results from events specialist ITE (LSE: ITE) show that the company is making encouraging progress. Its top line increased by 13% versus the same period of the prior year due mainly to acquisitions as well the company’s gradual pivot away from Russia, where trading remains challenging but prospects are improving.

This rise in revenue contributed to an increase in pre-tax profit of 36%, which was aided by fewer one-off costs versus the previous year. But with dividends per share falling by 40% as a higher dividend coverage ratio is sought by ITE, income investors may not be overjoyed about the update.

Looking ahead, ITE seems to have a sound strategy through which to navigate the challenges which it faces in Russia. Its diversification strategy should aid its long-term financial performance and with a new CEO set to take over in September and ITE due to grow its bottom line by 8% next year, investor sentiment could pick up and push the company’s share price higher. That’s especially the case since it trades on a price-to-earnings-growth (PEG) ratio of only 1.7, which indicates that it offers good value for money.

Should you invest £1,000 in Legal & General right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Legal & General made the list?

See the 6 stocks

Upside potential

Similarly, Findel (LSE: FDL) also appears to offer significant capital gain potential. Its restructuring seems to be a sensible strategy, with Kleeneze and Kitbag both being sold-off recently. The more streamlined Findel seems to have bright future prospects, with its bottom line forecast to rise by 11% in the current year and then by a further 19% next year. This has the potential to provide a step-change in investor sentiment, with Findel’s PEG ratio of just 0.3 indicating that it has major upside potential.

Certainly, Findel is undergoing a significant period of change at the moment and with its track record of financial performance being somewhat volatile, many investors may view it as being a risky stock to hold. However, with it having such a wide margin of safety, Findel’s risk/reward ratio holds significant appeal and it could begin to reverse the 15% fall in its share price which has been recorded since the turn of the year.

Change at the top

Meanwhile, Genel Energy (LSE: GENL) has today announced the appointment of a new Chief Operating Officer (COO). While this may not significantly move Genel’s share price in either direction, the rising price of oil has the scope to do so. In fact, with oil having risen by around 60% since its lows earlier this year, sentiment towards the wider oil sector could pick up if the profitability of the industry’s incumbents improves.

For example, shares in Genel have risen by 36% in the last month alone and looking ahead, a rising oil price could lift the company’s valuation yet further. However, with Genel having significant geopolitical risk within the Northern Iraq/Kurdistan region as well as a major impairment due in the current year’s accounts from a lowering of reserves estimates, there appear to be better options elsewhere within the oil sector for investors seeking to benefit from a rising oil price.

Should you buy Legal & General now?

Don’t make any big decisions yet.

Because Mark Rogers — The Motley Fool UK’s Director of Investing — has revealed 5 Shares for the Future of Energy.

And he believes they could bring spectacular returns over the next decade.

Since the war in Ukraine, nations everywhere are scrambling for energy independence, he says. Meanwhile, they’re hellbent on achieving net zero emissions. No guarantees, but history shows...

When such enormous changes hit a big industry, informed investors can potentially get rich.

So, with his new report, Mark’s aiming to put more investors in this enviable position.

Click the button below to find out how you can get your hands on the full report now, and as a thank you for your interest, we’ll send you one of the five picks — absolutely free!

Grab your FREE Energy recommendation now

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Peter Stephens owns shares of Findel. The Motley Fool UK has recommended ITE Group. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

piggy bank, searching with binoculars
Investing Articles

Here’s the growth forecasts for International Consolidated Airlines (IAG) shares through to 2028!

Shares of International Consolidated Airlines (LSE: IAG) have risen following a strong set of first-quarter financials last week. Is the…

Read more »

DIVIDEND YIELD text written on a notebook with chart
Investing Articles

These 10 FTSE income stocks could generate £33,137 a year in dividends

Our writer looks at the highest-yielding income stocks on the FTSE 350 and considers what level of return they might…

Read more »

Mature Caucasian woman sat at a table with coffee and laptop while making notes on paper
Investing Articles

What to do now before the next stock market crash

The recent stock market volatility seems to have subsided… for now. But that gives investors a chance to get ready…

Read more »

British Isles on nautical map
Investing Articles

Lower tariffs could be a game-changer for this FTSE 100 stock

Diageo shares have lagged the FTSE 100 badly over the last five years. But could lower tariffs on exports to…

Read more »

Content white businesswoman being congratulated by colleagues at her retirement party
Investing Articles

Smart investors are using a SIPP to become retirement millionaires! Here’s how to aim high

Investing in a SIPP can supercharge retirement savings and even lead to a million-pound nest egg by sparing just £500…

Read more »

Woman riding her old fashioned bicycle along the Beach Esplanade at Aberdeen, Scotland.
Investing Articles

2 world-class dividend stocks to consider for a retirement portfolio

These dividend stocks are relatively defensive in nature, meaning they could be well-suited to those seeking capital preservation.

Read more »

Businessman hand stacking money coins with virtual percentage icons
Investing Articles

7 simple Warren Buffett tips that could make investors richer

While Warren Buffett will soon be stepping down as CEO of Berkshire Hathaway, his investing advice remains more relevant than…

Read more »

Silhouette of a bull standing on top of a landscape with the sun setting behind it
Investing Articles

3 world-class dividend shares to consider before the next bull market

Falling interest rates could be a blessing for UK dividend shares. These three high-quality stocks deserve a close look as…

Read more »