Friday Email: 18 July 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:
After another dry week in terms of dividend announcements, we move next week into the interim reporting season with plenty of companies reporting and declaring their interim dividends. So we will get our first taste and indication of full year dividend outcomes. We start with Dialight on Monday and then pick up steam through Tuesday, Wednesday and Thursday and finishing on Friday with British Sky Broadcasting final results and Anglo American's Half yearly results.
It has been another tough week as the markets are quite volatile at the moment and there is no momentum behind what seem like rational decisions. We moved Easyjet into the model portfolio and the timing seemed right, just ahead of their 3rd quarter interim management statement next week, where we expect the numbers to be good. The move started well and then we had the tragedy in Ukraine which might hurt the stock. It certainly battered US airline stocks overnight. In early trading they have been pretty volatile but, perhaps with the recent big fall, people are looking to the IMS next week.
The coming week has the final dividend for SSE going ex (60.7p) for a yield just short of 4% at last nights close. A poor opening today, which may happen, given the events in Ukraine and the yield will go over 4% from this one dividend. Yesterday, they gave a trading statement that looked a little flat, but promised a further dividend increase this coming year at least in line with inflation.
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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Read next: 11 July 2014
That was a tough week in spite of very little real news. As is often the case at this time of the year scaremongering takes over on very little in the way of actual company news and this was the case on Thursday when fear of European meltdown suddenly raised its head again. We see these sorts of falls as a buying opportunity and have mentioned Easyjet on more than one occassion this week. Looking ahead there are some nice dividends to be picked up from SSE and Berkeley Group in particular who are returning cash to shareholders in a big way over the next 7 years. They are in a sector that continues to boom and sit over £4 below their recent high. They go ex-dividend for 90p on 20th August. Easyjet may be a longer wait but we expect that it will be well worth it as the stock has retreated almost 50% from its recent high on little news. We are still expecting a big dividend increase and possibly another special dividend again this year. It has been very interesting trading Next over the past few weeks as traders chose to ignore their stated buyback level of £64. This enabled investors to pick up the stock cheaply over the past few weeks, safe in the knowledge that the company would start buying back stock at anything below £64. This facilitated the easy pick up of the 143p dividend because it was clear that the stock would be supported by the company once the ex-dividend had been factored in. So, when the market fell sharply yesterday, Next kept its word and the stock rose 86p on the day.
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