Friday Email: 20 November 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 has had a good week so far having risen from 6118 on Monday to 6350 in pre market trading this morning, up 232 points or 3.8%.
The past week was pretty busy and there were good dividend increases from Avon Rubber (30%), B&M European Value Retail, chaired by Sir Terry Leahy (77.8%), Easyjet (21.6%), Big Yellow (16%) and Dart Group (20%). There were plenty of other solid rises and there was a big special from Johnson Matthey, which the market liked a lot with the shares rising almost 10% on the day.
My current favourite Ashtead has had a pretty good week so far and taking last years high plus the 25% rise in earnings this year, the target price has to be around £15, or about 40% higher than the current price. Adjust for the 4% fall in the FTSE this year and you are still looking at a 30% plus rise from here.
The market reaction to Easyjet's numbers looked a little harsh. A special dividend was expected by the market, but not from us as they embark upon an expansion of their fleet. They still remain a massive beneficiary of the low oil price.
We also like the look of Amec Foster Wheeler who are a good contrarian play with a good yield in spite of the prudent 50% cut in the dividend.
The week ahead is also pretty busy with plenty of companies reporting, mainly from the FTSE 250, but there are a couple of big utility companies reporting, namely Severn Trent and United Utilities.
The first US interest rate hike looks a near certainty following the economic data released this week and the hawkish fed minutes. We dont expect the UK and Europe to follow any time soon and we expect the US authorities to have a good look at the impact before raising rates again.
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: 13 November 2015
The FTSE 100 has endured a tough week so far and is down over 200 points on the week, this, in spite of the fact that interest rates look set to remain at the current low levels for some time. The problem with this is that clearly it is easy for investors to point to the fact that the economy still remains on life support. This means that dividends will continue to show real returns for investors for the foreseeable future compared to bank and building society deposits. However, with the big yields on offer, it is still unnerving for investors if they are nursing capital losses with the FTSE 100 still down for the year as a whole.
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