17-02-14: Short-term returns for investors

Plenty of short and long term punts this week for investors 

Jonny Smith's Shares

A quick review of last week saw a mixed week for Barclays and Lloyds amidst their final year result announcements. Barclays share price started off well last Monday with the early announcement of their results but tailed off during the week after a leak of customer data knocked confidence. Lloyds, who were tipped to see an increase in their share price due to positive trading year results, saw their share price take a u-turn on Thursday, demonstrated by a decline of 0.69 per cent on the FTSE 100.

First up this week I am going to assess Drax, a worldwide reputable coal fire plant company who have seen some quite fluctuant months on the stock market during the course of last year. In the past Drax has received some negative press relating to the environmental activists who hijacked a train on its way to the power station which the police were unable to convict anyone for.  But on a more positive note Drax has taken steps for the safety of local Selby residents with the handling of ash from its biomass burners after numerous locals have complained ash was polluting their air.

Drax

This has supported their public image, showing that Drax are quick to act on public safety concerns. After negative press, Drax has seen a share price resurgence during the early part of 2014, which is a good sign ahead of their final result of 2013 on Tuesday. Deustche Bank are tipping Drax to potentially reach 850p, which could make investors a six per cent yield on their investment, but Investec are suggesting a very optimistic target of 1,000p. The target by Deustche Bank is more realistic here considering Drax’s 52 week high is 829.50p, and low of 527.5p. My advice would be to wait for those results first to see if it alters how the market feels about the company before making the plunge to invest.

Next up is Playtech which is renowned for its online gaming software. It has expanded rapidly over the past few years into a worldwide bingo network, live casino, poker network, Live TV products, and sports betting platforms. I feel Playtech is only going to expand further with the recent addition of its mobile app, which appeals to a wider audience showing the continual growth in Playtech’s technological ability. The company supplies numerous online platforms for brands that include Betfair, Bet365, William Hill, and Sky to name a few. Playtech seeks to improve the online gambling experience through user friendly software. Market analysts have predicted the company was only slightly up on their forecasted annual results, which suggests there may not be much room for optimism, though I beg to differ.

Playtech

It is important here to assess how Playtech’s share price has shaped up over the past year, as the company’s share price has varied from a year low 528.6p with a year high so far of 761.5p in October. With the release of the Playtech’s results on Thursday I feel there could well be a new company year high, as the current share price is 734.5p. The company seems to attract new business, and this for me is a good investment long-term, as the company has got the backing from some of the big hitters in the gambling industry suggesting the share price could still go a long way.

Touching base with another company who have their second interim result on Thursday is Petra Diamonds. This looks to be a promising one with its share price growing by a massive 25 per cent in the first six trading weeks of 2014. On Valentine’s Day Petra announced they sold its 29.6 carrot gold diamond for $26 million USD, which must have been an expensive valentines present! Though joking aside the company has said this discovery could have a huge impact on its final quarter results with a share price increase of 1.28 per cent on Friday. Westbrook Securities has lifted its year target from 150p to 170p for Petra.

Petra

Overall, there is plenty of positive scope this week for investors to make a fruitful investment. Playtech looks a very good long-term investment, as recently their business seems to be expanding, helping to bring in more capital boosting the share price. Drax and Petra Diamonds look good safe investments with both companies recently experiencing periods of growth on the stock market, as analysts suggest the future looks bright for both companies. Hopefully this could be a prolific week for the investors, as these three companies are certainly worth taking a look at.

Article source: http://www.thelondoneconomic.com/jonnys-shares-2/17-02-14-short-term-returns-for-investors/

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