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Business, Finance, Occupation & Industry

Are These FTSE 100 Shares a Buy?

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By Royston Wild, The Motley Fool

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LONDON — I have recently been evaluating the investment cases for a multitude of FTSE 100 companies. Although Britain‘s premier index has risen 8.7% so far in 2013, I believe many London-listed stocks still have much further to run, while others are overdue for a correction. So how do the following five stocks weigh up?

GlaxoSmithKline
I reckon that accelerating product-development and moves into exciting new territories should barge GlaxoSmithKline back to growth over the medium term, underpinning its reputation as a dependable income play.

The company boasts an exceptional dividend-building record, even in times of earnings pressure. The pharma giant increased last year’s payout to 74 pence from 70 pence in 2011 despite a declining bottom line, and this is expected to rise to 78 pence and 82.7 pence, respectively, in 2013 and 2014. And dividend yields during this period are expected to remain well ahead of the 3.2% FTSE 100 average, at 5.1% this year and 5.4% next year.

Earnings per share are predicted to rise 2% in 2013 following last year’s 1% drop before accelerating 9% higher in 2014 as new products come online and offset the consequences of expiring IP. The firm’s shares trade on a price-to-earnings ratio of 13.3 for this year and 12.2 for next year, which I consider a decent value given the dividend dependability and exciting growth prospects.

Tesco
I am backing giant greengrocer Tesco to bounce back from increased competition from both high- and low-end competitors as it takes a step back from its international operations to boost activity back home.

City analysts expect EPS to slide 16% in the year ending February 2013, results for which are due on April 17, before hitting back in the coming years. Respective rises of 6% and 8% are predicted for 2014 and 2015.

Tesco is a favorite among income investors thanks to its generous dividend policy — an anticipated dividend yield of 3.9% for 2013 is expected to climb to 4.1% in 2014 and 4.3% in 2015. And coverage of 2.1 times next year and 2.2 times in 2015 should provide investors with peace of mind, even in the event of fresh earnings attacks.

Sweetening the deal, the supermarket’s stock currently changes hands on a lowly P/E rating of 11.5 for 2014 and 10.7 for 2015. This provides a chunky discount to a forward earnings multiple of 13 for the broader food and drug retailers sector.

Barclays
British high-street bank Barclays continues to endure a torrid time in the press, as its implication in the LIBOR-rigging scandal — combined with PPI misselling practices and news of jumbo bonuses to its top brass — has bashed its valued reputation.

Still, I believe the firm provides ripe investment opportunity moving forward. The company’s U.K. retail operations have enjoyed a decent start to the year, while plans to significantly boost its exposure in the opportunity-rich regions of Africa should help to boost growth. Barclaycard is also …read more
Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Are Any of These Shares a Buy?: Gulf Keystone Petroleum, SSE, and Unilever

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By Royston Wild, The Motley Fool

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LONDON — I have recently been evaluating the investment cases for a multitude of FTSE 100 companies.

Although Britain‘s foremost share index has risen 8.4% so far in 2013, I believe many London-listed stocks still have much further to run, while conversely others are overdue for a correction. So how do the following five stocks weigh up?

Gulf Keystone Petroleum
Despite Gulf Keystone Petroleum‘s mammoth 1.6 million pound cap, the firm is currently listed on the London Stock Exchange’s AIM index rather than the FTSE 100. The company holds a raft of promising oil assets in the Middle East, although I would advise investors to stay their hand until the results of its long-standing litigation battle is known.

Shares have trained gradually lower in recent months as fears surrounding its ongoing litigation with Excalibur Ventures drags along. The latter has claimed up to 30% of Gulf Keystone‘s massive oil assets in Kurdistan, Iraq, in a legal battle that has been roiling since mid-2011.

A decision on the matter is expected some time in the summer, and I expect a ruling in Gulf Keystone‘s favor will blast share prices higher, with positive drilling results in recent times underlining its excellent growth prospects.

In February, testing at its Bakrman-1 exploration well yielded another discovery at the Akri-Bijeel Block in Kurdistan, while it is also due to ramp up exploration and development work at the gargantuan Shaikan oil field in coming months.

SSE
I am backing electricity provider SSE to remain a stellar pick among income investors owing to its juicy dividend policy. And stakeholders can be confident of future payout rates due to its ultra-defensive operations in the utilities sector.

SSE‘s projected dividend yield of 5.8% for the year ending March 2013 remains well north of the 3.5% FTSE 100 average, and forecasters expect this to advance to 6% and 6.3% in 2014 and 2015, respectively. The firm continues to build chunky shareholder payouts, with 2012’s dividend of 80.1 pence expected to rise to 84.4 pence, 88.2 pence, and 92 pence in the following three years.

City analysts expect earnings per share to accelerate over the medium term, with growth of 1% in 2013 projected to increase 3% next year and 8% in 2015.

The company is changing hands on a price-to-earnings (P/E) ratio of 13.1 for the current year, but it is expected to fall to 12.7 and 11.8 in 2014 and 2015, respectively, which I consider a decent value given steady earnings growth estimates and rising shareholder payouts.

TUI Travel
Travel operator TUI Travel provides excellent growth prospects owing to its rising market share in Britain and key European markets and increasing activity through its online platform.

In its February update, the firm advised that it had shifted almost a third of its mainstream summer holiday packages already, with summer 2013 bookings in the U.K. and Nordic regions up 9% and 10% on year, respectively.

City brokers anticipate earnings per share to rise 7% in the …read more
Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Are Any of These 5 FTSE 100 Shares a Buy?

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By Royston Wild, The Motley Fool

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LONDON — I have recently been evaluating the investment cases for a multitude of FTSE 100 companies.

Although Britain‘s foremost share index has risen 9.1% so far in 2013, I believe many London-listed stocks still have much further to run, while conversely others are overdue for a correction. So how do the following five stocks weigh up?

Meggitt
I believe that revenues in aerospace and defense play Meggitt  are primed to take off due to rising exposure to the civil aerospace market. Turnover from this segment increased 7% in 2012 to £715 million, the company benefiting from its position as a major components supplier to the world’s leading aircraft builders.

Meggitt announced just last month that it had signed a mammoth $175 million contract with CFM International to provide thermal-management products for its LEAP engine variants, which will power the Airbus A320neo, Boeing 737MAX and COMAC C919 civilian-aircraft fleets.

Analysts expect earnings per share to rise 3% in 2013 before accelerating 9% in 2014, and Meggitt currently trades on a price-to-earnings (P/E) ratio of 13 and 12 for 2013 and 2014 respectively.

Although projected dividend yields come in below the 3.5% FTSE 100 average — yields of 2.6% and 2.9% are expected this year and next — the company has steadily increased shareholder payouts in recent years, and a dividend of 11.8 pence in 2012 is expected to rise to 12.6 pence and 13.8 pence this year and next.

Intertek
Product-testing specialist Intertek  has showcased excellent resilience in recent years, posting strong double-digit growth despite ongoing travails in the global economy. However, I believe that highly elevated earnings multiples at present mean that solid growth projections appear to have been already priced in, leaving little upside for investors.

Intertek currently operates more than 1,000 laboratories covering some 100 countries, and whose operations encompass a vast spectrum of industries, which has helped to insulate it from weakness in individual markets. The firm also has strong exposure to a conglomeration of red-hot growth markets, while rising activity in emerging markets should also underpin future expansion.

Turnover jumped 17% in 2012 to £2.1 billion, the company announced at the start of the month, pushing pre-tax profits 19% higher to £308 million.

Earnings per share are set to rise 14% in both 2013 and 2014, according to broker forecasts. However, the company currently changes hands on P/E multiples of 22.7 and 22 for these years, suggesting that strong growth rates are already factored into the current stock price.

BHP Billiton
I reckon that investors should steer clear of BHP Billiton  as a backdrop of volatile commodity prices, adverse currency movements and increasing output costs looks likely to keep the mining giant under pressure.

In particular, the company’s crucial iron ore operations look set to experience increasing woes in the next few years as steady production ramp-ups and subdued demand push the market into heavy oversupply. As well, its metallurgical coal, aluminum and nickel businesses should also suffer from excess supply over the medium term at …read more
Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Are These FTSE 100 Shares Buys?

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By Royston Wild, The Motley Fool

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LONDON — I have recently been evaluating the investment cases for a multitude of FTSE 100 companies.

Although Britain‘s foremost share index has risen 10% so far in 2013, I believe many London-listed stocks still have much further to run, while conversely others seem overdue for a correction. So how do the following five stocks weigh up?

BP
The fallout surrounding the 2010 Deepwater Horizon oil crisis continues to weigh heavily on industry giant BP . The company has heavily divested assets to cover the cost of the accident, the trial for which is ongoing and which BP expects final compensation to come out at $42 billion.

Although the court case currently hangs wearily over the oil giant, I believe rocketing production should propel earnings higher over the longer term. Output is set to surge higher from this year onwards at BP‘s major new projects, while maintenance-related closures at its other installations are set to slow considerably.

City analysts expect earnings per share to rise 39% in 2013 before leaping 8% in 2014. The oil leviathan currently trades on P/E ratios of 7.9 and 7.3 for this year and next, and whose excellent value for money is underlined by price/earnings to growth (PEG) projections of 0.2 and 0.9 for the same two years.

As well, BP‘s dividends are expected to remain well above the average 3.5% yield for the FTSE 100 — yields of 5.1% and 5.3% are anticipated in 2013 and 2014 correspondingly.

Centrica
I reckon Centrica  is an excellent pick for income investors looking for consistent dividend growth. The energy provider boasts a progressive payout policy, and City analysts expect a 16.4 pence per share dividend to rise to 17.4 pence and 18.3 pence per share during 2013 and 2014 correspondingly.

Yields of 4.9% this year and 5.2% in 2014 are projected, and although coverage of just 1.6 times is predicted, Centrica’s position in the ultra-defensive utilities sector should protect shareholder payments.

Group revenues increased 5% last year to £24 billion, which pushed total adjusted operating profit 14% higher to £2.7 billion. Despite the ongoing furor over last October’s decision to hike household energy prices, the firm remains highly resilient and continues to add new custom.

Earnings per share are forecast to rise 2% and 8% in 2013 and 2014 respectively. And I fully expect earnings to speed up thereafter, as rising strength within the British Gas subsidiary, combined with a drive to build the group’s upstream oil businesses both in Europe and the U.S., delivers improving investor returns.

Evraz
Enduring weakness in the steel price, allied to the potential for further large production closures, makes Evraz  a risky selection in my opinion.

Group crude steel production fell 5% to 16 million tonnes in 2012, the company said in January, as the impact of a vast modernization program — combined with the closure of a facility in the Czech Republic — pushed output lower. Evraz expects production to improve this year as its upgrade scheme nears completion, however.

City brokers expect …read more
Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Should You Buy These 5 FTSE 100 Shares?

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By Royston Wild, The Motley Fool

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LONDON — I have recently been evaluating the investment cases for a multitude of FTSE 100 companies.

Although Britain‘s foremost share index has risen 9.1% so far in 2013, I believe many London-listed stocks still have much further to run, while conversely others look overdue for a correction. So how do the following five stocks weigh up?

Wood Group
I believe that oil equipment services firm Wood Group  represents great growth potential at a reasonable price.

The firm’s 2012 results released yesterday showed pre-tax profits leap 43% to $363 million, driven by underlying revenues increasing 20% to $6.8 billion.

Wood Group expects all of its divisions to make headway in 2013, adding that conditions in the global energy markets are likely to remain favorable. Exploration and development spend rose 9% last year, and the company reckons that its prospects should remain solid over the long term.

City analysts forecast earnings per share to rise 31% this year. Earnings are then forecast to jump an additional 16% in 2014. This stellar profit growth is set to deliver ever-improving investor value, with a P/E ratio of 12.1 in 2013 projected to fall to 10.5 next year.

Wood Group‘s relative cheapness is underlined by a lowly price/earnings to growth (PEG) multiple, which is expected to come in at 0.4 and 0.7 in this year and next. A reading below 1 often represents excellent value.

CRH
I reckon that CRH  is chronically overvalued at current levels. The construction specialist’s shares have rallied to fresh highs above 1,500 pence in recent days, despite the precarious state of the European and North American building markets.

The group’s 2012 results released last month showed pre-tax profit dip 5% to 674 million euros due to enduring difficulties within the firm’s core Western markets. Revenues crawled just 3% higher to 18.7 billion euros.

City analysts predict a 60% earnings per share slide in 2013, before a 35% bounceback in 2014. This leaves CRH on P/E ratios of 20.5 and 15.2 for this year and next, which I consider nosebleed territory given the downside risks, particularly as the bombed-out markets of Europe continue to struggle.

The company is expected to offer a dividend yield of 3.8% and 3.9% for 2013 and 2014, respectively, above the FTSE 100 average of 3.5%. However, the potential for formidable earnings pressure could jeopardize any shareholder payouts, particularly with miserly coverage of 1.3 and 1.7 predicted for this year and next.

Randgold Resources
I expect shares in Randgold Resources  to head north as a combination of surging production levels over the medium term and ascending precious metals prices pushes earnings higher.

The company churned out 794,844 ounces of gold last year, up 14% from 2011 levels. This helped deliver record profits of $511 million, a 16% increase.

And Randgold is aiming to significantly increase output at its other assets to build future growth, particularly at its Kibali project in the Democratic Republic of Congo, which is due to start production in the fourth quarter. The miner hopes to …read more
Source: FULL ARTICLE at DailyFinance