Why Wm. Morrison Supermarkets, Barratt Developments, and Spirax-Sarco Engineering Should Lag the FTS
May 9th 2013 4:26PM
Updated May 9th 2013 4:50PM
LONDON -- The FTSE 100 has been hovering around yesterday's levels all morning, rising to set a new five-year record of 6,593 points at midday, to then fall back to 6,583 points as I write -- bang on its previous close. Although strong company earnings have pushed up the index of top U.K. shares in recent days, there have been a few weaker updates that are holding it back a little today.
Which shares are not doing so well? Here are three from the various indexes that are dropping today:
Shares in Wm. Morrison Supermarkets dipped 7.7 pence (2.6%) to 288 pence, after the firm reported a drop in performance in its first quarter. For the 13 weeks to 5 May, total sales excluding fuel fell by 0.6%, with like-for-like sales down 1.8%. Shareholders will also, presumably, be disappointed by the ongoing absence of online shopping at Morrisons, though chief executive Dalton Phillips did say, "Strategically, our ambition of building a genuinely multi-format, multi-channel Morrisons is right on track".
The price has picked up a bit since the start of the year, and Morrison shares are now on a forward P/E of a little over 11, which is in line with its main listed rivals, Tesco and Sainsbury.
An interim statement sent the Barratt Developments price down 5.3 pence (1.7%) this morning, though the homebuilder's shares are still up more than 150% over the past 12 months. The update did actually look positive, and the share price blipped up briefly before falling back.
The firm's forward private sales have now exceeded £1 billion, after net private reservations rose 9.7% during the period compared to the previous year, with a boost to 18% since the announcement of the Government's Help to Buy scheme. Net debt for 30 June is expected to be around £100 million, down from £167.7 million a year previously, and the firm aims to be debt-free by 2015. The final dividend should be "conservative".
Spirax-Sarco Engineering shares lost 17 pence (0.6%) to 2,741 pence after the engineer released a fairly neutral statement ahead of today's AGM. The firm, which specializes in steam and pumping engineering, told us that the year has started "in line with our expectations and ahead of last year", with a 6% rise in sales for the four months ending 30 April.
The firm's cash balance is up to £76 million, from £52 million in December, and there's going to be a decent dividend -- 37 pence per share ordinary dividend, plus a special dividend of £1 per share.
Finally, reliable dividends can more than compensate for the day-to-day ups and downs of share prices. So how about a company that's offering a 5.7% yield and which could be set for some nice share price appreciation too?
It's the subject of our BRAND-NEW report, "The Motley Fool's Top Income Share for 2013", which you can get completely free of charge -- but it will only be available for a limited period, so click here to get your copy today.
The article Why Wm. Morrison Supermarkets, Barratt Developments, and Spirax-Sarco Engineering Should Lag the FTSE 100 Today originally appeared on Fool.com.Alan Oscroft has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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