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Friday Email: 17 April 2015

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 FTSE 100 hit new highs on Wednesday but fell back on Thursday as worries about a Greek debt default and potential exit from the Eurozone once again kicked in. In the UK, the election battle continues to fascinate and the outcome remains very unpredictable. The strength of the markets suggests that the outcome will not matter all that much. Who knows? Usually, election years are good for the market. The worry of rises in interest rates over in the US has started to emerge as well this week and that is certainly going to have a big global impact on sentiment, but it is unlikely that that they will rise rapidly as the global economy remains fragile.

The past week saw WH Smith maintain its fantastic record of dividend increases with yet another double digit rise and continued share buybacks. You do wonder how long it can continue though when you look at their revenue figures which have dropped in each of the past 5 years. At some point they will need to address that, but so long as they keep generating cash and buying back shares, they remain a less attractive version of the Next model where you do see year on year increases in revenue. Surprisingly, WH Smith trades on a forward multiple of 16.4x and Next only 17.3x. 

The week ahead is again quiet with the Tesco numbers drawing the most focus. The election will continue to dominate the headlines and eyes will also be on Greece. Plenty of companies going ex-dividend in the coming week with quite a few yielding over 2% from the single dividend on offer including Novae, National Express, Old Mutual, Glencore, Legal & General, Hansteen, Bwin Party Digital and Tullet Prebon. Novae and Hansteen are also paying specials that takes the yields on offer to 4.8% in the case of Hansteen and over 5% for Novae.

This email was originally sent on Friday 17 April 2015

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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