5 Opportunities for the Week Ahead
LONDON -- We have a small but interesting mixture of news coming our way next week, and here are five companies that you might like to investigate before we hear what they have to say.
WH Smith (ISE: SMWH.L)
WH Smith is due to provide us with preliminary full-year results on Thursday, and the signs are good. At the time of the company's preclose update in August, we were told to expect results at the upper end of current forecasts. The high-street business is focusing on margins and cost-cutting, and the travel division is doing well despite the depressed economy.
The share price has stormed up to today's 656 pence from a low of 472 pence in June. But even after that nearly 40% rise, the shares are still not looking that expensive: Latest forecasts suggest a price-to-earnings ratio of less than 11, with a dividend yield of 4.1% expected. The dividend should be well-covered, and the firm's preclose update suggests we can have confidence in it.
Avanti (ISE: AVN.L)
Fancy a growth share punt? Satellite communications operator Avanti Communications, which will release full-year figures on Wednesday, might be worth a look. Avanti provides satellite-based high-speed broadband, and it's a business that's on the rise.
The much bigger Inmarsat has enjoyed very nice share price growth over the last few months, as its main marine communications market is back to growth, so what are the prospects for Avanti?
Well, revenue has been low, and profit has been erratic. In fact, the firm has recorded a pre-tax loss for the past two years, and a loss of more than 9 million pounds is expected for the year to June. But there is a small profit forecast for 2013. Avanti currently only operates one satellite, but there are two more planned over Africa and the Middle East, respectively, which are two strongly emerging markets for telecommunications.
After falling from a high in July, Avanti shares are currently priced at 341 pence.
Burberry (ISE: BRBY.L)
Troubled fashion retailer Burberry is due to issue a first-half trading update on Thursday, and investors will be looking for signs that the recent share price crash might have been overdone.
The wheels came off the growth story recently as fears of a fall in Chinese demand led the firm to issue a profit warning last month, and the share price slumped to today's 1,023 pence. It wasn't a bad one as warnings come, telling us that pre-tax profit for the 12 months to March 31, 2013 is likely to come in at the lower end of forecasts. But that's all it takes to chase away the enthusiastic followers of a currently fashionable investment.
Burberry has come back from falls before, so will it do it again?
Greggs (ISE: GRG.L)
High-street baker Greggs will release an interim update on Thursday, and its share price has been pretty erratic this year. After climbing to a high, it slumped a bit through April and May but has put on a bit of a recovery since, with a nice gain in the last month alone.
Forecasts for Greggs, which has been growing its dividend nicely in recent years, suggest a yield of 4% for the year to December, rising to 4.3% for 2013. And the current 520 pence share price puts it on a forward P/E of around 12.5, which does not seem overvalued.
Hays (ISE: HAS.L)
My fifth choice for next week is Hays, the recruitment specialist that is due to give us an interim update on Monday for the quarter ending Sept. 30. I always think recruitment firms are worth watching, because they give us some insight into the general state of the economy.
Hays shares have had an erratic, if overall flat, year, and forecasts for the full year to June 2013 are modest. At the current 79 pence price, the shares are on a forward P/E of more than 15, which seems perhaps a bit high. The expected dividend is a modest 3.4%.
Finally, there aren't any companies reporting next week, but there are plenty of opportunities in the oil and gas business -- but they can be hard to uncover. That's why we've produced the latest Motley Fool report, "How To Unearth Great Oil & Gas Shares," which should offer you some valuable insights. Click here to get your personal copy while it's free.
Investing is by no means easy in today's uncertain economy. That's why we've published "Top Sectors for 2012" -- our guide to three favorable industries. This free report will be dispatched immediately to your inbox.
Further Motley Fool investment opportunities:
The article 5 Opportunities for the Week Ahead originally appeared on Fool.com.Alan does not own any shares mentioned in this article. The Motley Fool has recommended shares in Burberry. The Motley Fool has adisclosure policy. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.
Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.