3 Shares the FTSE Should Beat Today
LONDON -- The FTSE 100 (INDEX: ^FTSE) is still hovering around last week's close, 17 points down on the day at 5,776. The lack of either exuberance or panic is probably a measure of relief after last week's European Central Bank plans to support the euro were met with enthusiasm.
But even if the index is holding up, there are individual companies whose prices are suffering this week. Here are three that the FTSE should beat today.
Burberry (ISE: BRBY.L)
Burberry has been climbing in recent months, but it hit the buffers today with a 19% fall to 1,108 pence. The reason? An announcement today that although sales for the 10 weeks ending Sept. 8 rose by 6% due to a "more challenging external environment for the sector," pre-tax profits for the full year are now expected to come in toward the lower end of current market expectations.
It's an example of what happens when strong profit growth is expected from a company, but then it turns out merely good, rather than sensational; it's all part of the quarter-by-quarter mentality that afflicts so many investors.
Oxford Instruments (ISE: OXIG.L)
Oxford Instruments slid 7% to 1,268 pence after issuing its annual general meeting statement this morning. The company, which makes high-technology tools and systems for industry and research, told us that its trading remains pretty much in line with expectations. But the markets clearly didn't like the additional comment that the firm is seeing "some softness" in its industrial markets.
The shares are still up more than 50% over the past 12 months, and on a forward price-to-earnings ratio of 20, they've clearly got a bit more growth priced into them. There is no meaningful dividend to speak of yet; it's less than 1%.
Betfair (ISE: BET.L)
Shares in Betfair lost 2% to 733 pence on the day of the company's first-quarter interim update. Although the quarter saw nice overall growth, with core revenue up 13% over the prior-year quarter to 91.6 million pounds, we were told that growth was slowed in August by punters distracted by the Olympics, and interest in betting on footie and horses subsequently waned that month.
And that, apparently, was the reason for the price fall -- another example of the quarter-by-quarter madness.
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