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3 stocks tipped to take off in October

3 stocks tipped to take off in October

Author: Royston Wild

Published by
Forbes

3m read

4 October 7.35am

Hargreaves Lansdown is not responsible for this article's content or accuracy and may not share the author's views. News and research are not personal recommendations to deal. All investments can fall in value so you could get back less than you invest. Article originally published by Forbes.

In this article I am discussing three stocks that could rally in the weeks ahead.

Mondi

I have long been a fan of packaging products supplier Mondi, and reckon next trading details (currently pencilled in for Wednesday, October 11th) should underline the company’s robust earnings outlook.

In its latest statement in August the FTSE 100 business advised of a chunky 8% improvement in revenues between January and June, which rose to €3.58m, and strong demand is enabling Mondi to successfully implement price rises with greater success to offset rising costs. And with the packaging play’s ongoing M&A strategy going to plan, boosting its position in key territories and product areas, I reckon the future is bright.

Mondi has already proven itself to be a safe growth bet for those seeking profits expansion year after year, and further rises of 14% and 7% are chalked in for 2017 and 2018 respectively. Such projections leave the company dealing on an ultra-attractive forward P/E ratio of 15 times. I reckon the paper play is a very attractive proposition at the current time.

Hays

I also believe Hays is a stellar stock selection right now as its operations on the continent continue to power ahead and conditions at home stabilise.

The recruitment specialists advised in August that net fees grew 18% in the 12 months to June, to £954.6m, with net fees growing by a record 14% in the European engine room of Germany. I am expecting the company’s next release - first quarter numbers are slated for Thursday, October 12th - to also impress.

Mondi Plc
1,884.00p -0.26%
Hays plc
187.2p -0.59%
Hastings Group Holdings plc
316.4p -0.28%

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Like Mondi, Hays also boasts a proud record of profits growth, the bottom line expanding by double-digit percentages over the past several years. And another 13% rise is forecast for fiscal 2018, resulting in a prospective earnings multiple of 17.4 times.

Whilst fractionally expensive on paper, I still reckon this represents solid value given Hays’ improving momentum, and expect the recruiter’s stunning share price ascent (the FTSE 250 star recently hit fresh 15-year tops above 190p per share) to keep on running.

Hastings Group

An ever-improving trading environment for Britain’s car insurers would also encourage me to check out Hastings Group ahead of its next trading update. Third quarter financials are anticipated for Friday, October 27th.

The business is reaping the rewards of steadily-rising motor premiums in the UK, and it saw gross written premiums shoot 28% higher, to £462m, between January and June as a result. But this is not the only story as Hastings is also grabbing trade from its rivals - its market share rose to 7% as of June from 6.2% a  year earlier, while the number of live customer accounts on its books swelled by 15% to 2.54m.

The number crunchers are predicting exceptional earnings growth of 47% in 2017 and 16% next year. And Hastings consequently carries ridiculously-cheap valuations - as well as a forward P/E rating of 14.1 times, the FTSE 250 firm also boasts a sub-1 PEG multiple of 0.3.

In addition, those seeking sizeable dividend yields should give the insurance leviathan a close look. A projected 12.8p per share reward forecast for 2017 yields a mighty 4.2%, and for next year a predicted 15.2p payment yields 5%.

This article was written by Royston Wild from Forbes and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.

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  • 4 October 7.35am
  • 3m read

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Article originally published by Forbes. Hargreaves Lansdown is not responsible for its content or accuracy and may not share the author's views. News and research are not personal recommendations to deal. All investments can fall in value so you could get back less than you invest.

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