3 Shares the FTSE Should Beat Today
Nov 16th 2012 10:39AM
Updated Nov 16th 2012 10:42AM
LONDON -- The FTSE 100 (INDEX: ^FTSE) is still on the way down today, dropping 1.1% to 5,615 points at the time of writing. The fall is mostly down to the gloomy news coming from Europe of recession, but one thing we have learned in recent years is that the best time to buy shares is when they're down.
Of course, individual company shares often fall for good reasons. Here are three that are sliding and look set to lag the FTSE today/
Melrose (ISE: MRO.L)
Melrose shares crashed this morning, falling 11.6% to 209 pence after the firm warned of an uncertain outlook for 2013. The FTSE 100 engineering group told us of a slowdown in sales and a weakening order intake, particularly within its energy businesses.
Melrose, which buys underperforming small companies with a view to turning them round and selling them, is still expecting its performance this year to meet expectations, but analysts will now surely be rushing to downgrade their 2013 forecasts.
Lavendon (ISE: LVD.L)
Lavendon slumped 7.7% to 128 pence after owning up to a weaker third quarter. Although the group's full-year performance should be in line with expectations, trading activity within some of the firm's key divisions appears to be suffering from the current hard economic times.
If this is a short-term blip, we could be looking at an oversold share price now. The latest price puts the shares on a price-to-earnings ratio of only a little more than 10.
Ultra Electronics (ISE: ULE.L)
Ultra Electronics lost 2.75% to 1,487 pence after the defense contractor issued a profit warning and announced the departure of finance director Paul Dean. Due to "adverse market conditions in the defense sector," the full-year performance is now expected to be only in line with 2011 figures.
Prior to today, City analysts had been forecasting pre-tax profit of around 110 million pounds. But with 2011's figures coming in at just 91 million pounds, the downgrades will be quite large.
Finally, how does Britain's ace investor Neil Woodford avoid share price falls? He goes for a strategy of buying solid blue-chip shares paying dependable long-term dividends. And in doing so, he has built a record of beating the FTSE for nine straight years. If you want to see how Woodford manages to beat the market, the free Motley Fool report "8 Shares Held By Britain's Super Investor" takes a look at some of his key holdings. To get your copy, click here while it's still available.
The article 3 Shares the FTSE Should Beat Today originally appeared on Fool.com.Alan Oscroft does not own any shares mentioned in this article. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.
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