3 Stocks I'm Tipping To Shine In August
CONTRIBUTOR-FORBES
Today I am looking at three stocks I reckon could take off this month.
Bellway
FTSE 250 housebuilding play Bellway is due to furnish the market with latest trading numbers on Tuesday, August 8th. And I reckon this could prompt the stock to set new record highs -- the Newcastle-based business hit peaks above £32 per share just this week.
The business announced in mid-June that demand for its homes continued to improve across all regions during the spring, a trend which helped the reservation rate improve 13% between February 1st and June 4th, to 221 per week. And this mirrored the slew of positive releases from across the sector in recent weeks.
Bellway’s ultra-low valuations could certainly provide additional ammunition for fresh buying activity following this month’s update. An expected 8% earnings improvement by City brokers for the year to July 2018 results in a bargain-basement forward P/E ratio of 8.2 times, not to mention a mere PEG multiple of 0.8.
And an anticipated 129.9p per share dividend yields a market-beating 4.1%.
Admiral Group
Car insurance giant Admiral Group is another stock trading much, much too cheaply at current levels, in my opinion.
The FTSE 100 star is predicted to report a 41% earnings rise in 2017. At first glance a subsequent forward P/E rating of 18.6 times (soaring over the British big-cap average of 15 times) may not appear too much to shout about. Having said that, a PEG readout of 0.5 for 2017 suggests the Cardiff company is actually attractively priced relative to its growth prospects.
There is plenty for income chasers to get excited about, too, a forecasted 112.7p per share dividend for the current period creating an enormous 5.4% yield.
Stock pickers should put Wednesday, August 16th in their diaries as I believe Admiral’s scheduled interims could lead to fresh share price strength. The company continues to benefit from the rapid ascent in vehicle premiums (these have exploded 11% over the past year to average £484, the Association of British Insurers announced this month).
And on top of this, Admiral’s growing presence in overseas markets is also keeping revenues on an upward path. I reckon there is plenty to be optimistic about ahead of this month’s financials.
Hill & Smith
Roadside sign and barrier manufacturer Hill & Smith could also receive a lift when it publishes its interims on Thursday, August 10th.
The Solihull company saw revenues clock in at £191.3m from the start of 2017 to April 30th, it advised in May, up 7% on an organic basis after adjusting for currency effects and the impact of acquisitions and disposals.
Demand for its road products continued to grow in the UK, as well as in the US and Australia, Hill & Smith noted, while sales across its Utilities division is also impressing on both sides of the Atlantic. And the engineer also witnessed a much-needed revenues improvement at its Galvanizing department in the period ending April.
Hill & Smith is predicted to keep its long-running growth story rolling with earnings expansion of 10% in 2017. While this creates a conventionally-toppy prospective P/E ratio of 18.6 times, I reckon this is still decent value given that the huge investment the British government is making in its road network should keep delivering meaty sales growth for many years to come.
