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Friday Email: 12 September 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:

That was a tough week when any advance on 7000 for the FTSE 100 was scuppered by an opinion poll showing that the Scotttish people may vote yes in the referendum next week. Clearly, the market thinks it will be a bad thing. It is difficult to imagine where the winners will be, either at a National level or inceed at a company level. Time will tell. No more on the subject other than to say that by the reaction to the poll, markets will fall sharply if there is a yes vote.

The week ahead is quiet on the corporate front.

The past week was eventful and unpredictable with market volatility rising. One of our great favourites, Apple produced its latest range of iPhones and a new product category with the Apple watch. They also introduced a payment system for the iPhone / watch.  They remain an absolute must for any portfolio.

Barratt Developments followed in the footsteps of the other housebuilders with a massive dividend increase and a capital return plan which is now in DividendMax and takes us out to 2017, further ahead than we normally go (2 years), but the company has been quite specific in what it intends to pay by way of ordinary dividend and 'specials' (capital return), so we felt it was reasonable to look that far ahead.

Two really great retail stocks; Next and the lesser known Dunelm produced very good dividend increases yesterday. Next upped their buyback price by only £2 to £66 indicating that they think the stock is pretty fully valued at current levels. They will continue to generate surplus cash however and if the buyback level is not reached, you will get £1.50 by way of ordinary dividends and I suspect the same again by way of specials. They paid 279p in the 2013 financial year. Dunelm are no slouches either and have a great track record. They paid a special in 2013 and may well pay another in 2015. Neither of these come cheap with Dunelm on 17.4 times earnings and Next on 17 times. You pay for what you get.

Next week, we are finally playing catch up after a lean period and we will release two pieces of research, one early in the week and another towards the end of the week. The first will examine closely those companies at the top of the Optimizer and the second will look at dollar denominated dividend payers. In order to make up for time lost during the moving period, we will aim to produce two pieces of research per month from October through December, before producing our small cap opinions and the model portfolio for 2015 in early January.

There is some method in this as we believe that the next three and a half months will be very eventful for the markets. This starts next week with the Scottish vote. Risk is rising politically across the globe. Potentially dangerous times lie ahead.

This email was originally sent on Friday 12 September 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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