2 stocks looking cheap on sparkling results

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Diamonds

I'm looking at results from a number of very different companies today, and here are two that I reckon should serve you well.

All that glisters

It's a bit risky investing in diamond mining, don't you think? I'd agree, but that doesn't mean there aren't bargains to be had.

Look at Gem Diamonds(LSE: GEMD) for example. Its shares have lost 21% over a very erratic two years, including a 4% fall to 112p on the day 2016 results were released.

On the face of it, the figures don't look good, with revenue falling by 24%, EBITDA down 39% and pre-exceptional earnings per share down 58%. On top of that, the firm placed its Ghaghoo operation "on care and maintenance" due to the low prices obtained for its diamonds, leading to a non-cash impairment of $176.5m and a reported loss per share of 114.9 cents.

But the company, which focuses on looking for large high-quality diamonds, found five larger than 100 carats during the year (down from 11 the previous year), and 34 with values in excess of $1m each. The haul included an 11.8 carat pink diamond, and the largest was a 160.2 carat white one.

Chief executive Clifford Elphick told us "the supply demand fundamentals for the diamond industry remain strong," and that's part of what makes Gem Diamonds look like an attractive prospect to me.

I usually turn my nose up at shiny things that have little or no value other than 'Ooh, that's pretty'. But the diamond market is very tightly controlled, dominated by the giant De Beers, which keeps a tight control on supplies to maintain high prices.

With earnings expected to recover strongly in 2018, we'd see a P/E of only 8.5 and an attractive low PEG of 0.2, and that makes me think Gem shares are good value.

Recruitment success

My second pick is recruitment specialist Robert Walters(LSE: RWA), whose shares took a bit of a nosedive when the result of the Brexit referendum became known. It was irrational, with the company having a very wide global reach, and the subsequent recovery means the short-term super bargain is now gone. But are the shares still worth buying?

Going on the long-term quality of the company and on Wednesday's 2016 results, I'd say yes.

The firm described it as a record performance, highlighting a 26% rise in pre-tax profit to £28.1m, with earnings per share up 34% to 27.7p. And its reach has now extended into four new countries: Canada, India, the Philippines and Portugal. The figures from just about everywhere were up, and 69% of net fee income now comes from outside of the UK.

Chief executive Robert Walters cautioned us about "the unpredictable geopolitical environment," but reckoned that the firm's "global footprint coupled with the range of recruitment services we provide positions us well to maximise opportunities for growth as they arise."

The dividend is up 20% to 8.5p, and though we're looking at only modest yields of around 2% to 2.5%, the cash is very well covered by earnings and is progressive -- and a progressive dividend can do a lot better in the long run than a higher dividend today.

Forecasts suggest steady earnings growth over the next two years, which would put Robert Walters shares on a 2018 P/E of under 14. I think that's cheap.

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Alan Oscroft 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.