5 Opportunities for the Week Ahead
LONDON -- We now have a few full-year results starting to come through, as half-year interims start to tail off, and next week brings us some important updates that may well provide nice buying opportunities.
Here are some thoughts on a few companies you might like to subject to a bit of background research ahead of their announcements:
Full-year results from homebuilder Barratt Developments (ISE: BDEV.L) are due on Wednesday, and the sector is enjoying something of a recovery.
I had a quick look at the interim results from fellow builderPersimmon earlier this week, and according to Barratt's recent pre-close update, we should expect something similarly good.
On July 11, Barratt told us to expect pre-tax profits up more than 150% over last year to around 110 million pounds, from sales that rose by 14% to 2.3 billion pounds after the completion of 12,637 homes. Margins are on the up, too, with an operating margin of 8.2% for the full year recorded, against 6.6% last year -- with the second-half margin reaching 9.5%.
Barratt's share price has more than doubled in the past 12 months, to today's 169 pence, but as of yet there is only a small recovery in the dividend expected -- hopefully Wednesday's update will tell us more on that.
In a related business, we have annual results from construction and civil engineering group Kier (ISE: KIE.L) scheduled for Thursday, and again the upcoming statement has been preceded by a positive update. Trading, we were told in June, was "resilient," and 85% of the company's forecast construction revenue for 2013 is already on its order books as "secured" or "probable."
The City is currently forecasting a dividend yield of more than 5%, and estimates put the shares on a price to earnings ratio of 9. The shares have done well in the past few months, having risen 17% since the beginning of April to today's 1,330 pence, but current valuations suggest they could still be too cheap. More details of the company's outlook on Thursday could help cement that feeling.
Keeping to Thursday, we should enjoy annual results from Dunelm (ISE: DNLM.L) , and if you want to see shares that have climbed a wall, look no further -- they are up more than 25% since late June, and 35% on the year, to 584 pence.
The household goods retailer, which trades as Dunelm Mill, gave us a pretty positive update in July, and has been a winner in the post-crisis stock-market recovery so far.
With the shares offering a modest dividend yield of 2.2%, according to forecasts, and sitting on a P/E of 17, they seem a bit toppy right now to me. But the long-term valuation should, I think, be based on the firm's future dividend policy, and that's what I'll be looking out for.
Pub chain JD Wetherspoon (ISE: JDW.L) is due to release full-year results on Friday and they will hopefully justify the recent share-price rally, which has seen the price soar by around 25% since the middle of May to today's 463 pence.
In July, the company said it had experienced a strong final quarter, buoyed by Jubilee and Euro 2012 celebrations, which helped boost total sales for the year by 9%, with like-for-like sales up 3%. A net 37 new pubs were opened, with 20 to 30 planned for next year. The firm also bought back 5.6 million shares during the year at a cost of 23 million pounds.
Looking forward to 2013, current forecasts suggest earnings growth of 6%, a forward P/E of 11, and a dividend yield of 2.9%.
I'm going to close today with a quick look at Sinclair IS Pharma (ISE: SPH.L) , a company I know nothing about. Why? Well, this is all about learning, and a lot of people do like a nice growth candidate from time to time. And we have full-year results coming on Thursday.
Sinclair is a fairly small company, with its shares priced at 26.5 pence for a market cap of a little over 100 million pounds. The firm is in a growth phase -- and it is valued accordingly. What does it do? Well, according to its website, the group develops products "to treat wounds, dermatological and oral diseases through advanced surface technology and innovative delivery systems."
Sinclair's pre-close trading statement on July 10 reported a 56% rise in revenue to 51 million pounds, and the firm is expecting progress in emerging markets "in the near future." The company is really just on the verge of profitability, so traditional ratios don't mean much now.
But for investors looking for pharmaceuticals and biotechnology growth candidates, keep your eyes peeled on Thursday.
Oil and gas
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The article 5 Opportunities for the Week Ahead 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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