Is the KAZ Minerals share price a bargain FTSE 250 turnaround stock?
The FTSE 250 has experienced a significant fall in recent months. Having reached an all-time high of 21,324 in May it has fallen to its current level of 18,700. That’s a decline of over 12% in the six-month period and suggests that investor sentiment has weakened.
During the same six months, the share price of copper miner KAZ Minerals(LSE: KAZ) has declined by around 50%. The company has been relatively unpopular since it announced an acquisition and uncertainty surrounding the world economy may be weighing on its valuation.
As a result, could now be the right time to buy it? Or could another FTSE 250 share which released positive results on Thursday generate improving stock price performance in the long run?
The stock in question is beverages company Britvic(LSE: BVIC). It released full-year results which showed a rise in revenue of 5.1% to £1,503.6m, with organic revenue increasing by 2.7%. Its adjusted operating profit increased by 5.4%, with organic adjusted operating profit rising by 4% to £206m.
The company recorded positive volume and price/mix which enabled it to deliver balanced revenue growth. It has also been able to successfully navigate the soft drinks levy, with its low- or no-sugar portfolio showing strength. Its Stills revenue in the UK delivered growth, while Pepsi continued to gain market share, driven by Pepsi Max.
Looking ahead, Britvic is expected to post a rise in earnings of 6% in the current financial year. Since the stock trades on a price-to-earnings (P/E) ratio of around 14, it seems to offer fair value for money at the present time. Therefore, it may offer investment potential for the long run, in my opinion.
As mentioned, the KAZ Minerals share price has endured a challenging six-month period even when compared to the wider FTSE 250. Investors seem to be cautious about a recently-announced acquisition in Russia. There are also concerns about the prospects for the world economy, with the chance of further tariffs and a higher US interest having the potential to reduce demand for a range of commodities.
But the company could have a stronger growth opportunity than the market is currently anticipating. It continues to ramp-up production, with its recent production update highlighting that this has been a relatively smooth process. Alongside this, demand for copper could exceed supply over the medium term, and this may create a positive trading environment for operators in the industry.
With KAZ Minerals trading on a P/E ratio of around 6, it seems to offer a wide margin of safety at the present time. Certainly, volatility is likely to be high, and further share price falls cannot be ruled out. However, for investors with a long-term view and who are less risk-averse, the stock could offer investment appeal as well as recovery potential in my opinion. In the long run, it could even outperform the FTSE 250.
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Peter Stephens has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended Britvic. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.