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Friday Email: 26 August 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 FTSE 100 is down about 50 points on the week for its second consecutive weekly fall. 

The market has shown some very good resiliance in the face of attempted mark downs and some early selling pressure on both Wednesday and Thursday and to a lesser extent today as some commentators suggest that we are in for a big correction. I remain very bullish of the market purely on yield grounds as there is nowhere else to put your money that is liquid and giving a decent return. A strategy of buying companies with ever increasing dividends is always going to pay off in the long term and there are plenty of companies out there that are doing just that.

One such company, still a favourite of mine, which has promised to increase its dividend by 20% for the next two years is Photo-Me. They announced that they would buy Asda's UK photo business this week in what looks like a very good deal. Initially dilutive, but apparently any dilution will be wiped out by currency gains this year. It should not take them long to turn around the business. Lets face it, its what they do. It will add about 10% to total revenues. There is still a 6.1p (approx 3.8%) dividend to be had (going ex on the 6th October). 

Another big favourite of mine, ITV showed that they would not overpay for acquisitions by pulling out of their bid for Entertainment One. That should lead to another special dividend this year unless thay find another sizeable target to acquire. It also retains my faith in their excellent management. When ego's are at play in M&A, it can lead to disaster as witnessed in the RBS / Barclays battle for ING. 

Meanwhile, this morning Lavendon declared an interim dividend up 18% on last year. The shares are up over 20% since we mentioned them two weeks ago.

The week ahead is very quiet with only a handful of companies reporting.

This email was originally sent on Friday 26 August 2016

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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