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Friday Email: 24 May 2013

Every Friday morning our lead analyst Mark Riding sends out his weekly run-down and upcoming events in the investor calendar, like this one:

The markets took a necessary fall yesterday and it was a relief to see it. Almost every stock that I have looked at over the past weeks has an identical graph showing a virtually unblemished rise up. Experience tells you that this will not last and so it did not. I still remain bullish for the full year outurn and would not be surprised to see the FTSE 100 breach 7000 by year-end, but I expect the markets to trade sideways to down through the summer months with the now customary year-end rally.

Yesterday saw some very nice dividend increases and special dividends were announced by Paypoint and Aveva, who both increased their 'normal' dividends by 15%. We like special dividends! QinetiQ also increased it's dividend by 31% and Booker by 15%. Investec and SABMiller both managed 11% increases. Earlier in the week Telecom Plus and Burberry managed 14.8% and 16% increases respectively. Paragon managed a 60% increase in it's interim dividend. Halfords was the big disappointment of the week, cutting it's dividend by 35%. We did alude to the fact that it had gone way too far in our divdend of the week of April 23rd. It was duly punished by the markets and fell 16% on the day. Looking back, we purchased Halfords at 189p in July 2012 and picked up a 14p per share dividend. Yesterday they fell 63p to 333p and cut the final dividend to 9p. We sold last September at 267p. I certainly would not buy them at the current level and it shows in one stock the levels of, yes, I am going to use the famous phrase, Irrational Exuberance that the markets have been displaying these past few weeks.

So the market looks like it has already got over yesterdays fall and has bounced a little way already. Caution remains the watchword. Looking at the DividendMax calendar next week is much quieter than the week just past with yesterday being one of the busiest of the year for dividend declarations.

This email was originally sent on Friday 24 May 2013

The Friday email is delivered to over 20,000 subscriber’s every week, and remains a widely read run-down of recent events and what investors can expect in the week ahead written by our chief analyst Mark Riding.

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