Will AstraZeneca plc, Flybe Group PLC And Acal plc Prove To Be Stellar Turnaround Stocks?

Should you pile into these 3 stocks despite poor starts to the year? AstraZeneca plc (LON: AZN), Flybe Group PLC (LON: FLYB) and Acal plc (LON: ACL).

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

sdf

Shares in customised electronics supplier Acal (LSE: ACL) have risen by around 7% today after it released an upbeat trading update for the full year to 31 March. Encouragingly, earnings are set to be slightly ahead of previous guidance, with sales and margins both performing better than expected.

For example, sales for the year increased by 14% at constant currency and a key reason for that was strong numbers from Acal’s design and manufacturing division. It accounted for 48% of group sales and with its top line rising by 3% on a like-for-like (LFL) basis, it made a positive impact on overall financial performance. Furthermore, with Acal’s design and manufacturing division benefitting from the impact of recent acquisitions, its total sales rose by a very impressive 50%.

With Acal forecast to increase its bottom line by 14% this year and by a further 12% next year, it seems likely to turn around the 6% share price fall recorded since the start of the year. That’s especially the case since Acal trades on a price-to-earnings-growth (PEG) ratio of just 1, which indicates that now could be a great time to buy it.

Should you invest £1,000 in Morgan Advanced Materials Plc right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Morgan Advanced Materials Plc made the list?

See the 6 stocks

Profit potential

Also in the news today is Europe’s largest regional airline Flybe (LSE: FLYB), with the company announcing that its new franchise partnership with Blue Islands will commence on 6 June. This is a 10-year franchise partnership, with Blue Islands operating six routes into Jersey. It should help Flybe to retain a presence on key routes to and from the Channel Islands and has been structured to accommodate additional aircraft and routes if required.

Clearly, Flybe’s share price performance has been hugely disappointing since the turn of the year, with its valuation declining by 36% during the period. However, with its shares trading on a PEG ratio of just 0.1, it offers superb capital gain prospects. As such, and while it can be difficult to buy any stock at its lowest ebb, for long-term investors Flybe offers excellent profit potential.

A good buy?

Also declining since the turn of the year have been shares in AstraZeneca (LSE: AZN). They’ve fallen by 10% and have underperformed the wider index by 11%. Clearly, this is disappointing, but with AstraZeneca having strengthened its drugs pipeline in recent years it’s in a much stronger position than it has been for a number of years.

Due to this, the company has excellent turnaround potential. It also has the financial strength to continue with its acquisition programme and build a more diverse and potentially more profitable pipeline. And with it previously forecasting a doubling of sales by 2023, investor sentiment in the stock could be positively catalysed. With a price-to-earnings (P/E) ratio of 14.7, AstraZeneca appears to offer good value for money and while its turnaround story has a long way to go, it seems to be on track and worthy of purchase right now.


Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Peter Stephens owns shares of AstraZeneca. The Motley Fool UK has recommended AstraZeneca. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Businessman hand stacking money coins with virtual percentage icons
Investing Articles

2 FTSE 100 and FTSE 250 growth shares to consider in an ISA

Looking for the best growth shares to buy in a Stocks and Shares ISA? Here are two I think could…

Read more »

Silhouette of a bull standing on top of a landscape with the sun setting behind it
Investing Articles

2 top shares to consider for a Stocks and Shares ISA as August nears

Looking for ideas for a Stocks and Shares ISA? Our writer outlines why he's bullish on these two innovative growth…

Read more »

ISA coins
Investing Articles

Can funds like this help ISA investors retire with a large passive income?

Exchange-traded funds (ETFs) can be powerful weapons in helping ISA and SIPP investors build wealth for retirement.

Read more »

ISA Individual Savings Account
Investing Articles

With a yield of up to 6%, could this bank help a Stocks and Shares ISA generate £10,000 of passive income a year?

A Stocks and Shares ISA is a popular way of saving for retirement. But how much would be needed to…

Read more »

Thoughtful man using his phone while riding on a train and looking through the window
Investing Articles

This FTSE 250 trust is easily beating the global index in 2025. Time to buy?

One global FTSE 250 investment trust has been turning things round recently, with a handy bit of outperformance. Ben McPoland…

Read more »

Bournemouth at night with a fireworks display from the pier
Investing Articles

Is the fizz about to go from the Coca-Cola HBC share price?

The world’s most popular drink’s hitting the headlines again. Our writer considers whether there are any implications for the Coca-Cola…

Read more »

Portrait of a boy with the map of the world painted on his face.
Investing Articles

3 top FTSE 250 investment trusts to consider buying today 

This trio of high-quality trusts from the FTSE 250 index would give a Stocks and Shares ISA portfolio a truly…

Read more »

Arrow symbol glowing amid black arrow symbols on black background.
Investing Articles

Another strong set of results from this FTSE 100 telecoms company. Time to buy?

The FTSE 100’s Airtel Africa released its first-quarter earnings yesterday (24 July). Our writer’s been taking a closer look at…

Read more »