RE: Re: Edinburgh zoo20 Sep 2018 13:35
Interseting to see your view that this is a buying opportunity, something all the investing experts who really know their stuff disagree with. Interesting thoughts from Investomania yesterday.
https://investomania.co.uk/2018/09/is-the-interserve-plc-share-price-cheap-for-a-reason/
The investment prospects of Interserve plc (LON:IRV) (IRV.L) remain uncertain in my view. The company is forecast to post a significant fall in EPS in the current year, and this could hurt investor sentiment in my view.
The company’s performance could be negatively impacted by tough trading conditions. Although it has what I consider to be a sound strategy that is focused on reducing costs, I believe that it could take time for it to implement a successful turnaround.
Clearly, the company has the potential to win new contracts. But I believe that it may take a period of improved financial performance for investor sentiment to improve. The stock has a forward P/E ratio of around 10 according to my research, and this suggests that it may be relatively unloved by investors at the moment.
With Interserve having a considerable amount of debt on its balance sheet at the moment, I believe it could be a relatively risky stock to hold. Interest rates are forecast to increase over the next couple of years, and this could squeeze its profitability to at least some extent. It may also hurt investor sentiment and cause further share price declines.
After a 42% share price fall in the last year, I think that the company could see its valuation come under further pressure in the short term. Although Interserve’s current strategy could lead to improved financial performance in the long run, the company may have an uncertain near-term future ahead of it.
Therefore, it’s not a stock that I’m bullish about. I believe that there may be better opportunities across the FTSE All-Share for me at the moment. Even though share prices in general are relatively high, growth potential is robust in a number of sectors, and they could deliver stronger investment outlooks over the coming years to my mind.