Friday Email: 01 April 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:
The past shortened week has seen more volatility in the stock market with the sequence from Tuesday being down, up, down and today we are down for an overall loss on the week and the month. For March the FTSE 100 is down about 70 points. As always when the markets are tough, the bulk of any returns comes from dividends. Market uncertainly will continue as the oil price and the dollar fly around and of course in the UK we have the added uncertainty of the Brexit vote which will not help the UK markets at all.
Next has continued to fall after last week in spite of the company making market purchases for cancellation. They are still on a PE of around 13x, so they still do no look super cheap, but they are headed that way and are well below their buyback level of £69, which is the level at which they believe any purchases for cancellation will be enhancing to earnings.
The week ahead is quiet in terms of earnings reports, but is extremely busy on the ex dividend front as a result of the reporting season that has just passed. There are around 40 companies that we cover going ex-dividend this coming Thursday.
Those of note with a yield of over 3% from the single dividend are BBA Aviation (3.05%), Pearson (3.75%), Aviva (3.05%), Chesnara (4.02%) Vesuvius (3.37%) and Entu (4.44%).
This situation continues throughout April with well over 100 companies going ex dividend this month.
New into DividendMax this week are Harvey Nash and Caledonia mining corporation.
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.
It’s included as part of the free DividendMax trial.
Read next: 25 March 2016
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.
— Interested in a free trial? —