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3 FTSE 100 Shares You Should Have Bought In July: ITV plc, BAE Systems plc And London Stock Exchange Group Plc

After dipping in June, the FTSE 100 (FTSEINDICES: ^FTSE) had a better time in July, ending the month 405 points (6.5%) up at 6,621. A similar rise in August would send the index of top UK shares crashing through the 13-year record of 6,876 points it set in May, taking it above 7,000 points.

We saw a good number of individual shares gaining solid ground in July too, so which would you have done well to put your money on? Here are three that gained nicely, and which look to have good long-term prospects.

ITV

Shares in TV producer and broadcaster ITV (LSE: ITV) stormed up 28.5p (20.3%) to close July on 168.6p, briefly hitting a 52-week high of 171.6p on the way. Strong first-half results announced on 30 July gave the price an extra impetus, with adjusted pre-tax profit up 16% to £270m and earnings per share (EPS) up 15% to 5.3p.

Revenue did only rise by 2%, but we saw a welcome shift to lower dependence on income from advertising as chief executive Adam Crozier told us that “Non-advertising revenues were up by 11% to £568m, driven by significant growth in Online, Pay & Interactive and in ITV Studios“, with advertising revenues falling during the half.

ITV shares have soared by almost 120% over the past 12 months, and at today’s price of 167p they’ve nine-bagged since the depths of the credit crisis in early 2009. But even after that, were only looking at a year-end P/E based on current forecasts of 16.5, just a little over the FTSE’s long-term average of about 14. With continuing earnings growth forecast, there could be more to come.

BAE Systems

I was particularly pleased to see BAE Systems (LSE: BA) (NASDAQOTH: BAESY.US) shares climb 62.9p (16.4%), during July, to end the month at 445.9p — I recently saw BAE as one of the hidden gems of the Fool’s Beginners’ Portfolio, having added the shares at a price of 332.3p back in October 2012. Since that rise, BAE has gone on to release first-half results on 1 August, sending the share price up further to 455p.

BAE shares have put on more than 70% over the past two years, after previously falling to very low P/E ratings as the entire engineering sector become something of a pariah to pessimistic investors — public spending on defence was being slashed around the globe. At their lowest year-end valuation in December 2011, BAE shares hit a P/E of just 6.3 while providing a dividend yield of 6.6%.

That’s history now, but even after a subsequent strong two years (and a great July), the shares still look cheap to me. With EPS forecast to grow by 9% for the year to December 2013, the shares are still on a forward P/E of only 10.5, with a well-covered dividend expected to provide a 4.6% yield.

London Stock Exchange

When stock markets are booming, what better shares to buy than the market itself? If you’d bought shares in London Stock Exchange (LSE: LSE), you’d have had a happy month, with the price gaining 237p (17.7%) to end July on 1,574p. An interim management statement on the 18th of the month revealed that revenue for the first quarter was up 39% to £249.7m, with organic revenue up 8%. Chief executive Xavier Rolet told us “In particular, we have delivered strong results from FTSE, MillenniumIT and from Capital Markets, reflecting an uplift in admissions and money raised, and improving market sentiment in secondary markets“.

The LSE has enjoyed three years of rising earnings, and though forecasts for the full year to March 2014 suggest a drop in EPS of 4%, the shares are still on a P/E of only a little higher than average at 15.5. If we’re genuinely heading into a new period of economic growth, that could turn out to be cheap in the long run — though the firm’s low dividend yield of 2% is perhaps a little disappointing.

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> Alan does not own any shares mentioned in this article.