3 Shares Trading at 2012 Prices
LONDON -- Shares in J Sainsbury, AMEC, and Pearson are trading at the same price today as they were at the beginning of the year. Has the market correction pushed them back into buy territory?
J Sainsbury's recent trading statement confirmed an increase in market share and like-for-like sales growth. Chief executive Justin King is proud of the growth that the company has delivered. The end-June figures confirmed 34 successive quarters of sales growth at the company.
After trading close to 400 pence during May, Sainsbury's shares are back at the level they were at the start of the year.
Using the consensus of broker forecasts, the 2013 P/E for the stock has come down to 11.4 times earnings. The expected yield is back up to 4.8%. On both measures, Sainsbury's is notably cheaper than the average FTSE 100 stock.
Brokers' forecasts for 2014 equate to a P/E of 10.6, with an expected yield of 5%.
Engineering specialist AMEC is one of the FTSE 100's great growth stories. In the last five years at the company, earnings per share (EPS) has risen from 27.9 pence to 77 pence. In the same time, dividends have risen from 13.4 pence per share to 36.5 pence.
After reaching 1,124 pence in February, shares in AMEC are today back down to 990 pence.
Analyst consensus is for another two years of earnings and dividend growth at AMEC. If this comes through, then the shares are priced at a 2014 P/E of 10, with an expected yield of 4.5%.
AMEC's fortunes will depend on those of its largest customers. The current panic in the resources sector has hit sentiment. If the depression lifts, however, then there is significant upside potential in AMEC shares.
Although Pearson is probably best known as owner of the Financial Times, it is the education services arm that makes the most sales.
The most recent trading statement from the company confirmed that Pearson expects to report a similar level of profit this year as it did in 2012. If analysts' expectations for EPS of 78.8 pence are met, that puts the shares on a P/E of 14.7. Pearson is forecast to report a 12th successive year of dividend increases. At today's share price of 1,160 pence, expectations are for a yield of 4.1%.
Demand for educational services is benefiting from the ever-growing global middle class. Pearson is a great play on this trend. More growth is forecast next year, lowering the P/E to 12.9 and increasing the yield to 4.4%.
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The article 3 Shares Trading at 2012 Prices originally appeared on Fool.com.David O'Hara does not own shares in any of the above companies, and neither does The Motley Fool. 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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