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Friday Email: 20 June 2014

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

Yet another quiet Friday with no companies reporting. This is followed up with similar on Monday, but Tuesday brings one of our favourite companies, Imagination Technologies and we are looking for a clear indication that their strategy of investing for the long term and the internet of things is working. The price has drifted back after a strong run. Carpetright, Essar energy and Domino printing sciences report on the same day. Stagecoach, Dixons Retail and Smith (DS) all report finals over the following two days and the week finishes with Hornby rail which was added to DividendMax at the request of one of our members.

So a quiet week lies ahead as with the previous week which revealed that Berkeley look set to deliver on the their proposed £1.7 billion return to shareholders and Micro Focus shares performed very well in the face of some pretty flat numbers. 

Personally, I do not like the feel of the market and especially in the U.S. where all of the good market reactions seem to be as a result of interest rate promises being extended over and over again. At the same time, GDP growth is being downgraded. I am not sure that this is a good thing. Meanwhile, we are not really clear on the effects of QE tapering so now is definitely a time for caution in our view. We like companies that have shown growth in the face of the entire financial crisis such as Next, who, as we predicted last week resumed share buybacks as soon as the price fell below £64. The two dividends are not far away either.(9th July) Of the ex-divs next week, KCOM look attractive, as they have promised 10% dividend increases for the next two years and they do not look demanding. They are investing heavily this year, but will still pay the increased dividend form their strong cash generation so it is one to look at when any significant weakness arises. They go ex this Wednesday for 3.25p against last nights closing price of 91.21p.

So, the summer lull continues and we can look roward to the next big reporting season in a few months time which will set the stage for the year end rally (or not).

This email was originally sent on Friday 20 June 2014

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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