Friday Email: 28 November 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:
The week past was pretty good from a dividend perspective with 7 companies increasing their dividend by double digit percentages including Greencore, Kcom, Britvic, Compass and RPC. The stars of the show were Paragon who increased by 25% (and announced a £50 million buyback) and Renew Holdings who increased by 39%.
The price of oil is falling continuously at the moment and looks set to keep falling due to oversupply. At some point the less economic producers will have to stop producing and the price will rise again. Many of them will be hedged at much higher prices so that will take some time to work through. We still think Afren is worth a look at current levels. Most of their production is hedged into the middle of next year at $90 a barrel. Meanwhile our old favourite Easyjet is flying high on the back of falling crude. In general, the price of oil falling gives a boost to the whole economy as the price of a major input falls, so consumers have more money in their pocket and the costs of transporting goods across the world falls.
The week ahead is fairly busy but we are starting to tail off as we move into December with 11 companies in the UK that we follow reporting including a former dividend of the week, Photo-me (November 2012 at 50p) who are on a roll and should produce really good numbers on Thursday. Another company we like a lot are Aberdeen Asset Management who report on Monday. We also like Betfair and Berkeley, who both report next week, but they have both had tremendous runs of late and really should have been picked up earlier in the year when they were well down. Berkeley in particular got hammered after its trading statement, but they have bounced back as their results approach and we may find out details of their next return of capital with their interim results on Friday.
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: 21 November 2014
In spite of the past two trading days being down, the FTSE 100 is still up 51 points on the week and looks set to continue its recent rally from the October lows. The miners are holding it back though as they continue to get battered on fears of China slowing down. It is very difficult to call the turn as the price of commodities is not just set by the end user demand. There are investment banks, hedge funds and other institutions who speculate massively on the price of commodities and they are capable of driving the prices down.
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