Sunday share tips: Wood Group, Cake Box

by | Aug 27, 2023

(Sharecast News) – The recent failed takeover for Wood Group could present a buying opportunity for investors, suggests the Mail on Sunday’s Midas column.
The disappointment of VC firm Apollo walking away from its 240p-per-share bid in May sent the stock tumbling to around the 140p level. It has recovered since then, to 156p as of Friday’s closing price.

However, Midas highlights that Wood Group could still be undervalued, currently trading at less than nine times forward earnings for 2024. It cites comments from Investec, which said that if the stock was trading in line with the sector average valuation ratio, the shares would stand at 245p.

“The company has a diversified portfolio of clients in 60 countries, and the need for sustainable solutions for oil and gas companies is not going away,” Midas wrote.

“Recovery may not be swift, but […] today’s Wood shareholders may find patience is rewarded. And there’s always the chance of a nibble on the line from another interested purchaser in the short term. Reel this one in.”

The recent underperformance of Cake Box could also present an attractive opportunity for investors, according to The Sunday Times’s Lucy Tobin.

After floating in 2018 just over 100p a share, the stock was up over 400p in late 2021, but has since tanked to just 157p. Meanwhile, a 160p-a-share takeover approach from an Australian cheesecake company in July was rejected.

Nevertheless, things are looking up, Tobin writes. Sales across franchised sites rose nearly 7% in the first 17 weeks of its financial year.

The company also said it is seeing signs of easing inflation in some key ingredients such as fresh cream, while its trial of supermarket kiosks in Asda is providing successful.

“Cake Box is light on capital demands and is cash-generative, but the shares are trading at a price/earnings ratio of only 13,” Tobin said. “Let them eat cake – and profit off the back of it. Buy Cake Box.”

Related articles

Sunday share tips: GB Group, Keystone Law

Sunday share tips: GB Group, Keystone Law

(Sharecast News) - The Sunday Times's Lucy Tobin recommended shares of fraud prevention software manufacturer GB Group to readers. She conceded that the share price had been hammered over the part year, as the wave of interest in cryptocurrency and online retailing...

Sunday newspaper round-up: HS2, Babcock, Airbus

Sunday newspaper round-up: HS2, Babcock, Airbus

(Sharecast News) - The Prime Minister is facing enormous push back from senior Tories and captains of industry due to signs that he may walk back on plans for the northern section of the HS2 high speed rail service before the party conference next weekend. Rishi Sunak...

Latest Articles

London close: Stocks mixed on global economic jitters

London close: Stocks mixed on global economic jitters

(Sharecast News) - Stocks in London ended Tuesday on a varied note, reflecting global apprehensions around the Chinese economy and rising interest rates, while the shadow of a US credit warning from Moody's loomed large. The FTSE 100 saw a modest uptick, finishing...

JP Morgan reaches settlement with US Virgin Islands over Epstein case

RS Group surges on Betaville report

(Sharecast News) - RS Group surged on Tuesday after markets blog Betaville pointed to "a fresh round of takeover speculation" in one of its latest uncooked alerts. Betaville said that people following the situation have heard rumours that RS Group, a distributor of...

Deutsche Bank, Morgan Stanley cut Burberry price targets

Deutsche Bank, Morgan Stanley cut Burberry price targets

(Sharecast News) - Luxury fashion brand Burberry took a hit on Tuesday as both Morgan Stanley and Deutsche Bank cut their price targets on the stock. DB cut the price target to 2,200p from 2,240p, saying it's more cautious on trends in China and in the US and is...

Join our mailing list

Subscribe to our mailing list to receive regular updates!

No Fields Found.