Restaurant Group
Shares in Restaurant Group (LSE: RTN) are down 6% today after the company released a mixed trading update. While sales in the 45 weeks since the start of the current financial year are up 10.3% year-on-year, the company noted that, since August, sales had weakened. Furthermore, it stated that it was coming under cost pressure, too.
Despite this, Restaurant Group reiterated its full-year guidance and, with like-for-like sales up 3% in the 45 week period, it appears as though it is benefiting from an upturn UK economic performance. Indeed, this trend could continue into next year as disposable incomes are set to rise in real terms.
With shares in Restaurant Group now trading on a price to earnings (P/E) ratio of 21.3, they seem to be fully valued even though earnings are due to rise by 12% next year. As such, the company’s share price could continue to be pegged back over the near term.
Premier Farnell
Premier Farnell (LSE: PFL) is heavily in the red today, with its shares being down 9%, after warning that full-year operating margins would be behind last year’s levels by around 0.5%. The major reason for this is weaker-than-expected trading conditions in Asia and Europe.
Furthermore, the product mix has been unfavourable to Premier Farnell, with a slowdown occurring in high-margin Asian business and an acceleration taking place in low-margin North American Business. This comes just a day after sector peer Electrocomponents announced similar challenges in its markets. However, unlike Electrocomponents, customer discounts do not appear to have played a major role in Premier Farnell’s margin squeeze.
With Premier Farnell trading on a P/E ratio of 11.2 and being expected to increase earnings by 15% next year, it seems to offer growth at a reasonable price. Indeed, a price to earnings growth (PEG) ratio of 0.7 could indicate upside potential over the medium term.
Caza
Third-quarter results released today by Caza (LSE: CAZA) were upbeat and showed that the company is making encouraging progress. For example, revenue increased by 180% year-on-year to $7.2 million during the period, which also represents a rise of around 15% versus the prior quarter. Meanwhile, despite a falling oil price that reduced the average price received by 12%, adjusted EBIDTA jumped by 730% to $4.5 million.
Furthermore, Caza has cash of $7.4 million and appears to be highly optimistic regarding its current performance and its prospects for 2015. Despite this, shares in the oil and gas producer have been down by as much as 5.5% today, but yet are still up 67% since the turn of the year.
While the fall in shares price could be due to profit taking, the future for Caza seems to be bright. Certainly a lower oil price would not be great news for the stock, but the strong performance seen in 2014 could, on the evidence of its update, continue into 2015.