3 Stocks You Should Buy Right Now - PAF, ETO, OSB

Tuesday, May 03 2016 by
9

In this post, I hope to direct you toward 3 companies that I think you should buy ‘right now’. By ‘right now’, this doesn’t mean you should jump on the phone to your broker straight away. Always do your own research. The aim here is to identify great companies to invest in at the right time and at a good price. These may be companies of all shapes and sizes, ripe for investment for a whole host of reasons. 

Pan African Resources (LON:PAF)

Gold is the hot topic among investors and commentators at the moment. After a bullish beginning to the year, investors are hoping for a change in fortune for the precious metal, which has taken a beating over the last couple of years. Naturally, the falling gold price has hit gold miners as well. If we are on the brink of a climb in the gold price, then there could be the opportunity for considerable upside for investors. 

One company that stands out to me is Pan African Resources (LON:PAF). Like all gold miners, Pan African Resources (LON:PAF) has seen its share price tumble. Last year, the company issued a profits warning in June indicating may be 60% below than the year previous. Despite this, the company looks in great shape. One danger is that a company may accrue significant debts in an effort to survive the prolonged slump in commodity prices. However, with a Piotroski F-Score of 8 out of 9 and very low gearing on its assets, Pan African Resources (LON:PAF) looks to be in a financially sound position. This is echoed by the 6 brokers that cover the stock all issuing Buy or Strong Buy recommendations. 

The company released results in February and with profits more than doubling and costs reducing - Pan African Resources (LON:PAF) appears well poised if the gold price continues its upward trend. 

Entertainment One (LON:ETO)

One for the value investors this one and a stock I hold myself, Entertainment One (LON:ETO). 

Entertainment One (LON:ETO)…

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Disclaimer:  

Everything that is posted is just my opinion, not advice or recommendation.

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Pan African Resources PLC is a precious metals producer engaged in mining. The Company operates through six segments: Barberton Mines, located in Barberton South Africa, derives revenue from sale of gold to South African financial institutions; Evander Gold Mining Proprietary Limited and Evander Gold Mines Limited (collectively known as Evander Mines), located in Evander South Africa, derives revenue from sale of gold to South African financial institutions; Phoenix Platinum, located in North West province in South Africa, derives revenue from sale of platinum group element concentrate to Western Platinum Limited; Uitkomst Colliery, located in Newcastle, KwaZulu-Natal, derives revenue from sale of coal to local and export markets; Corporate office and growth projects, including PAR Gold Proprietary Limited, derives revenue from management fee from providing management and administration services to other group companies, and Funding Company, which provides treasury function activities. more »

LSE Price
11.9p
Change
-2.1%
Mkt Cap (£m)
234.3
P/E (fwd)
4.2
Yield (fwd)
5.1

OneSavings Bank plc (OSB) is a United Kingdom-based lending and retail savings company. The Company operates through three segments: Buy-to-Let/SME, Residential Mortgages and Personal Loans. The Company provides Buy-to-Let mortgages secured on residential property held for investment purposes by experienced and professional landlords and commercial mortgages secured on commercial and semicommercial properties held for investment purposes or for owner occupation. It also provides residential development finance to small and medium sized developers and secured funding lines to other lenders. The Company lends to owner-occupiers with a geographical bias towards London and the South East. OSB also offers bespoke residential first charge, second charge and shared ownership mortgages through specialist brokers. It also provides secured funding lines to other lenders. The Company also offers unsecured lending services. more »

LSE Price
364.6p
Change
-0.7%
Mkt Cap (£m)
900.2
P/E (fwd)
5.7
Yield (fwd)
4.8

Entertainment One Ltd is a Canada-based independent entertainment company. It develops, produces, markets and distributes content. The Company's segments include Film, Television, Music, Family and Brands, and Innovation. The Film segment in collaboration with partners develops, acquires, produces and finances film content. The Television segment through partnerships and global distribution network produces and distributes television content. The Music segment built musical brands, as the Company is part of the network eOne Management Group. The Family and Brands segment is involved in the creation of family content and develops, launches and roll out content-related products. The Innovation segment provides digital content, such as virtual reality (VR) and the platform to discover it. more »

LSE Price
569.5p
Change
0.3%
Mkt Cap (£m)
2,830
P/E (fwd)
20.2
Yield (fwd)
0.3



  Is LON:PAF fundamentally strong or weak? Find out More »


3 Posts on this Thread show/hide all

TraderTim 3rd May '16 1 of 3

Apologies - some issues with the first publish resulting in none of the content showing! :/

Blog: Trader Tim
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herbie47 3rd May '16 2 of 3

I did have a look at OneSavings Bank (LON:OSB) last October when there was a post about it but I thought it was overpriced then as the share was around 380p. Also the directors had just sold millions of shares. I believe they specialise in the BTL market, so very exposed if the property market crashes?

You should be comparing it with Paragon of Companies (LON:PAG), Shawbrook (LON:SHAW) and Aldermore (LON:ALD).

http://www.stockopedia.com/compare/?tickers=LON%3AALD%2C+LON%3ASHAW%2C+LON%3APAG%2C+LON%3AOSB%2C+

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TraderTim 3rd May '16 3 of 3

Hi Herbie47,

That's a fair point. The Director sells do not concern me too much, though had I been looking at the time your were looking they probably would have raised an alarm bell. There is significant buying interest as well - I believe Old Mutual now hold a ~9% stake.

They do have more exposure to BTL than the conventional bank. Comparing it to Paragon of Companies (LON:PAG), Shawbrook (LON:SHAW) and Aldermore (LON:ALD) I still think OneSavings Bank (LON:OSB) comes out favourably. Paragon of Companies (LON:PAG) and Aldermore (LON:ALD) are heavily leveraged, so both of these companies look risky plays to me. OneSavings Bank (LON:OSB) levels of debt look more reasonable.

Also, OneSavings Bank (LON:OSB) has had the strongest sales growth of the 4 companies and a much stronger operating margin - the next best here is Aldermore (LON:ALD) at 40.6% - which is the catalyst to their growth. Not to mention the recent acquisition of Residenti UK, which will extend their footprint and potential profitability.

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