Company of the week: BG Group

Gas and oil giant BG (LSE: BG) has very quickly gone from stock-market darling to virtual pariah. That’s what happens when you don’t make as much money as the City expected you to.

A profit warning this week from the company has been blamed on the fact that a lot of its Egyptian gas is being sold domestically at lower prices, rather than exported for higher ones. A further blow is that BG is not going to produce as much oil and gas as people had thought it might this year.

For years investors were prepared to pay high prices for BG’s shares because they thought it had the potential to grow very quickly. It still might, as it has some very good, large assets in Australia and Brazil that could deliver a lot higher profits five years from now.

The trouble for bargain hunters is that the shares do not look particularly cheap or distressed, despite its profit setback.

The company may not be popular now, but it does have some quality assets that other oil companies would love to get their hands on, and that’s why the shares are unlikely to be a steal any time soon.

The long-term outlook is still good for BG. Patient investors could be well rewarded by paying up now.

Verdict: buy

66% off newsstand price

12 issues (and much more) for just £12

That’s right. We’ll give you 12 issues of MoneyWeek magazine, complete access to our exclusive web articles, our latest wealth building reports and videos as well as our subscriber-only email… for just £12.

That’s just £1 per week for Britain’s best-selling financial magazine.

Click here to take advantage of our offer

Britain is leaving the European Union. Donald Trump is reducing America’s role in global markets. Both will have profound consequences for you as an investor.

MoneyWeek analyses the critical issues facing British investors on a weekly basis. And, unlike other publications, we provide you with the solutions to help you turn a situation to your financial advantage.

Take up our offer today, and we’ll send you three of our most important investment reports:

All three of these reports are yours when you take up our 12 issues for £12 offer today.

MoneyWeek has been advising private British investors on what to do with their money since 2000. Our calls over that period have enabled our readers to both make and save a great deal of money – hence our position as the UK’s most-trusted investment publication.

Click here to subscribe for just £12