Are NCC Group plc (+10%), Thomas Cook Group plc (+10%) and Shanks Group plc (-12%) 'buys' on today's major price moves?

Updated
Investing in the FTSE 100
Investing in the FTSE 100

Shares in NCC Group(LSE: NCC) have risen by as much as 10% today after the global cyber security company released impressive full-year results. Revenue rose by 56% versus the prior year, with 19% organic growth. Adjusted operating profit soared by 46% and this allowed NCC to raise dividends by 17% to 4.65p. This is an increase of over 10 times since the company floated in July 2004 and puts NCC on a yield of 1.7%.

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Looking ahead, NCC Group offers excellent growth prospects. Its bottom line is due to increase by 13% this year and by a further 16% next year. This puts it on a price-to-earnings growth (PEG) ratio of 1.1 and this indicates that while its shares may have risen sharply today, there could be much more to come. That's especially the case since NCC looks set to benefit from a tailwind due to cybercrime becoming an even greater threat over the medium-to-long term.

Further to fall?

Also rising today are shares in Thomas Cook(LSE: TCG), with the travel company up by as much as 10%. That's despite no significant news flow having been released by the business. Clearly, Thomas Cook is enduring a difficult period as demand for flights and holidays in Europe and other parts of the world has fallen due to fear of further terrorist attacks.

As such, Thomas Cook's share price has slumped by over 50% since the turn of the year and further volatility could lie ahead. In addition, Brexit may cause demand for luxury/discretionary items such as holidays to fall yet further, which would cause Thomas Cook's financial outlook to deteriorate. Therefore, investors should seek out a wide margin of safety before buying its shares.

With Thomas Cook trading on a PEG ratio of just 0.2, it seems to offer excellent value for money. In the long run it could prove to be an excellent investment, but in the short term things could realistically get worse before they get better. Therefore, for less risk-averse investors Thomas Cook looks like a sound buy, but could trade lower over the coming months.

Cost savings

Meanwhile, shares in waste disposal specialist Shanks(LSE: SKS) have been down by as much as 12% today despite a lack of news. Of course, Shanks is in the middle of a merger with van Gansewinkel Group, which could see significant synergies and an improved financial outlook for the two companies. In fact, Shanks believes that cost savings could be made in a number of areas including route optimisation, site rationalisation, improved procurement and several other areas. This could lead to rising profitability and improved investor sentiment.

Of course, Shanks's share price performance year-to-date has been disappointing, with it having fallen by 16%. And while the merger may act as a positive catalyst on its share price, its price-to-earnings (P/E) ratio of 16.2 indicates that it's over-priced at the present time.

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Peter Stephens has no position in any shares mentioned. The Motley Fool UK owns shares of NCC. 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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