2016 is shaping up as a poor year for investors in Britvic (LSE: BVIC), which is down 23% since January, BTG (LSE: BTG), down 19%, and Tasty (LSE: TAST) which has sunk by 25% since the beginning of the year.
Should you shun these 2016 losers or are they primed to rebound during 2017 and beyond?
Challenges ahead, but confident directors
Britvic delivered its full-year results statement at the end of November. Despite challenging conditions, 2016s trading was good with revenue and profit both up around 10%. In a show of confidence, the directors hiked the dividend by 6.5%.
However, in 2017 the firm will face difficult trading conditions and input cost inflation, the directors say. They point to the UKs vote to leave the EU and the proposed soft drinks levies in Britain and Ireland from April 2018 as drivers of additional uncertainty.
Yet the directors remain upbeat suggesting the firms strong balance sheet and a robust strategic plan will overcome obstacles to deliver results in line with expectations for 2017.
We dont often have the chance to buy a defensive consumer goods business when it looks out of favour. At todays share price around 560p Britvic trades on a historic price-to-earnings (P/E) ratio just over 11 and the dividend yield runs around 4.4%. I think its a good time to look past short-term concerns at the bigger long-term picture here.
Double-digit revenue growth drives strong first-half performance trumpets Novembers interim report from specialist healthcare company BTG. The firms chief executive, Louise Makin, reckons the outlook for the full year is strong.
Indeed, BTG is making great progress growing revenues and profits internationally from several products, so whats this falling share price all about? It could be that previously the shares moved too far ahead basedon expectations surrounding a new varicose vein treatment that the firm is rolling out in the US. Progress is slower than expected by many and political uncertainty surrounding the healthcare sector across the pond wont be helping investor sentiment around BTG either.
Yet BTG remains a quality enterprise with strong, profit-supporting cash inflows, no debt, and growing revenues capable of generating a decent double-digit profit margin. At todays share price near 562p, BTG trades on a forward P/E ratio just over 17 for theyear to March 2018 but theres no dividend, suggesting the directors see plenty of opportunity for further growth.
A successful rollout programme
A placing in November at 145p per share raised a gross 9m to help Tasty fund its successful restaurant rollout programme. I suspect that the placing price could act as a cap on the share price for a little while but based on all past performance, rising profits, revenues and cash flow will shine through to push the shares back on their upwards trajectory in due course.
Tasty is adding Wildwood-branded restaurants to its estate at a rate measured in high-single-digits each year at the moment and Ive been impressed with the consistency of growth in all the right financial measurements. At todays share price around 143p, you can pick up the shares on a forward P/E rating of just under 18 for 2017.
A top growth share to research right now
If you like the look of Britvic,BTGand Tasty, I think you will also see the potential in a firm that one of the Motley Fool UK’s top investors has identified asA Top Growth Share.
This British firm is spreading its international wings and could be on the cusp of gaining critical mass abroad, which could mean the company powers forward to become one of the nation’s next great international success stories. The sharescould do well in the years aheadtoo.
To find out more you can download this research, free of charge, right now byclicking here.
Kevin Godbold owns some BTG and Tasty shares. The Motley Fool UK has recommended Britvic, BTG, and Tasty. We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.