Friday Email: 23 August 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 UK stockmarket has an uneasy feel to it right now. It was a week when two dividend giants increased their dividends by small percentages to keep up incredible track records. BHP Billiton increased their 2013 annual divdend by 4% and Carillion by 2%. Both of these companies are out of favour with investors, which is a reflection of investor's view on their sectors. In contrast, a very in form sector saw Bovis Homes increase their 2013 interim dividend by 33%. Hikma pharmaceuticals also did well increasing their interim dividend by 16.7% and they also paid a special dividend at the interim stage. There were plenty of companies passing on the dividend this week including Premier Oil, New World Resources, Kazakhymys and Hochschild mining.
Overall, I suspect my uneasiness comes from the apparent anomolie that the world and most obviously the United States economy is on the mend. So why are all of the companies passing their dividends this week from the commodities sector? Is world trade picking up or isn't it?; and if it is; why are commodities prices and therefore resource stocks struggling so much? I wish I knew the answer.
On a more positive note, Amlin increased their dividend by 4%, IMI by 8% and Phoenix group which are high on the optimizer, by 27%. This morning Berendsen increased their interim dividend by 10%.
The week ahead starts very quietly and starts to get going from Wednesday onwards with a two more resource stocks, Antofagasta and Polymetal international reporting. On Thursday we look to see how Admiral has performed in light of softening motor insurance rates and another high yielding insurer, Chesnara reports on Friday.
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Read next: 16 August 2013
The market remains set in holiday mode and our fears, expressed last week have come to pass to some extent. We still see no reason to be particularly bullish, but as always there are opportunities to be had. We could suggest short positions, but generally we look to go long. This week we successfully added Imagination Technologies and Imperial Tobacco to our trading portfolio with very good short term outcomes in both caes. Imagination rose over 15% in one day on Wednesday. Imperial bucked the market trend on Thursday rising over 2.5% as the market fell over 100 points. I look forward to our trading portfolio rising over 100% since September 2011 in the not too distant future. It currently sits at 96%.
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