Why are Ibstock plc, Daily Mail and General Trust plc and Hostelworld Group plc among today's biggest movers?

Updated
Investing in the FTSE 100
Investing in the FTSE 100

Shares in Hostelworld(LSE: HSW) have fallen by around 26% today after it released a disappointing AGM update. It states that while the company made good progress in the first quarter of the year, trading over the second quarter has been at a level below its expectations. This is at least partly due to weakness in Europe, where geopolitical events have caused bookings into higher-priced destinations to be weaker than anticipated.

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Looking ahead, Hostelworld is forecast to increase its bottom line by 10% next year and with its shares trading on a price-to-earnings (P/E) ratio of around 10, it seems to offer good value for money. While average booking value has been lower in the current year versus the prior year, Hostelworld has a new marketing campaign and is focused on optimising its cost base. As such, for investors who can live with an above-average degree of volatility, Hostelworld could prove to be a strong long-term buy.

Advertising woes

Also falling today are shares in Daily Mail and General Trust(LSE: DMGT), with the publishing company recording a fall of 9% in its valuation. That's largely because of a drop in the company's revenue and profitability, which is reported in today's half-year results. Sales for the six month period fell by 1%, while underlying operating profit declined by 12% as advertising revenues were lower than in the same period of the previous year.

Looking ahead, Daily Mail and General Trust now expects its dmg media segment to deliver an operating margin of around 10% for the full-year due to the particularly weak print advertising market. And with the company's bottom line already forecast to fall by 6% prior to today's release, investor sentiment in the stock could weaken in the coming months. Certainly, Daily Mail and General Trust may have a bright long-term future, but with its shares trading on a P/E ratio of 12.1 there seem to be better options available elsewhere.

Slow start

Meanwhile, shares in brick manufacturer Ibstock(LSE: IBST) have fallen by around 10% today after it released a rather mixed AGM trading update. While it's on track to meet expectations for the full year, Ibstock noted that the UK clay business made a slower start to the year than expected. This was due to destocking in the builders merchant supply chain. However, monthly comparatives have steadily improved and have now moved positive. And with trading conditions in the US and UK being upbeat, Ibstock remains positive about its long -term potential.

With Ibstock forecast to grow its bottom line by 15% in the current year and by a further 13% next year, investor sentiment could quickly reverse in the coming months following today's share price fall. And with it trading on a price-to-earnings growth (PEG) ratio of just 0.8, now could be a good time for long-term investors to buy a slice of the business.

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Peter Stephens has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

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