Friday Email: 25 March 2016
Every Friday morning our lead analyst Mark Riding sends out his weekly run-down and upcoming events in the investor calendar, like this one:
It is a beautiful start to the Bank holiday weekend in Brockenhurst with clear blue skies and two T20's ahead in Englands group today. What more could I want? More of the same...but unfortunately it is going to rain for the rest of the weekend. That is analogous to the markets last week where we peaked at 6233 on the FTSE 100 last Friday and then we endured another volatile week and ended on Thursday at 6103 with the FTSE down almost 100 points on Friday. It was a very stormy day yesterday for Next. They got absolutely battered in spite of profits at the upper end of guidance. They fell 17% at one point, which was their biggest fall since 1998 and ended the day down 15%. In a year when Leicester City could and should win the Premiership, Next, who are based in Leicester will end the year well down with no chance of a comeback from this. They gave us a 5% increase in the dividend and there is a little bit of money left in the pot for share buybacks, but they spent a lot of that pot buying back shares at much higher prices in January. An unusually bad error on their part. That said, they are too high quality not to recover at some point in the future, so should be watched. As we are on the sporting theme, form is temporary, class is permanent.
On the bright side in a relatively quiet week for corporate earnings we had Wolseley looking very solid and increasing their dividend by 10% and the same increase from S&U. NAHL increased by 19% and once again the star was a housebuilder as Bellway increased their interim dividend by 16%.
The short week ahead is also quiet with little corporate activity. This time next week I should be looking forward to seeing England in the T20 World final, but I'm not holding my breath. T20 is rather like the markets at the moment. Volatile, unpredictable and exciting.
New into DividendMax this week, we have Trinity Mirror.
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: 18 March 2016
That was a decent week for the markets with the FTSE 100 rising 90 points over the course of the week with the miners and oil companies holding onto their recent gains in spite of many commentators telling us to beware the rally. In my view it would be a very bad idea to not hold any natural resource stocks at this stage of the economic cycle. Keep away from smaller companies that do not have the financial strength of the majors as their hedges at prices way above the current market prices are going to run out or diminish sooner rather than later.
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