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New World Resources - Prospective PE of less than 2 for next year

October 2008

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

  • Epic Code:
  • NWR
  • Price:
  • 511p
Investors have slashed shares in New World Resources (NWR; 511p), a leading producer of hard coking and thermal coal in the Czech Republic, during the past month. This followed first half results, which due to higher mining costs came in slightly below expectations but like Hargreaves Services (HSP; 580p), NWR is guiding analysts to substantially higher contracted coke prices for the second half of the year. The implication of this is that results will meet forecasts from Cazenove for earnings climbing to 138p for the current year to 31 December and an eye watering £3 next. On that basis the shares trade on a prospective PE of 3.7 dropping to only 1.7 for next year. New World is controlled by Zdenek Bakala, a billionaire Czech fi ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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