Today I’m looking at three London stocks making the news in end-of-week trading.

Property play on the charge

Property investment trust Shaftesbury (LSE: SHB) gave the market a bubbly trading update Friday, news that sent shares 2.3% higher from the prior close.

Shaftesbury advised of “continuing strong tenant demand” between 1 October and 4 February, “underpinned by robust footfall and spending“. The company said that strength in the London economy has supported strong tenant demand across both retail and leisure sectors.

The City fully expects earnings to keep accelerating at the London-based business. A 14% advance is chalked-in for the period to September 2016, leaving Shaftesbury dealing on an elevated P/E rating of 62 times.

A projected dividend of 14.5p per share for the year, yielding a handy 1.7%, lessens the blow of this heady multiple somewhat. And while Shaftesbury remains an expensive stock selection by conventional metrics, it could be argued the firm’s strong upward momentum — facilitated by its exposure to the strong London economy — fully justifies such a premium.

Divestment news drives shares skywards

Electronics manufacturer Premier Farnell (LSE: PFL) also made the headlines after announcing the sale of its firefighting and emergency response unit Akron Brass for $224.2m. News of the divestment sent shares 6.6% higher from Thursday’s close.

In other news, Premier Farnell also advised that profits for the year to January 2016 should fall within its previous guidance of £73m to £77m.

The divestment of Akron Brass will allow Premier Farnell to “pursue growth opportunities within the core electronics distribution business,” it said, not to mention boosting profitability in the current period and cutting its debt pile.

The number crunchers expect earnings to fall 18% in the year to January 2016, while a hefty dividend cut from 10.4p per share to 6.2p is currently pencilled-in.

But a 3% earnings bounceback is predicted for the current period, leaving the business dealing on a mega-cheap P/E rating of 8.7 times. And another estimated 6.2p dividend creates a bumper 6% yield.

However, as sales continue to deteriorate badly across its core European and North American markets, I believe investors should be cautious concerning current forecasts before piling into what is, conventionally-speaking, an ultra-cheap stock. I reckon Premier Farnell could be set to endure further travails as macroeconomic turbulence worsens.

Grocer on the ropes

Shares in struggling grocery giant Sainsbury’s (LSE: SBRY) continue to be volatile, thanks partly to the divisive move to hoover up embattled Argos owner Home Retail Group.

The stock price was more settled in Friday trading, however, and was last up 1% on the day.

Sainsbury’s finally nailed its acquisition of Home Retail Group this week after its first approach in November, a £1.3bn bid being enough. But I believe the business has bitten off more than it can chew — indeed, Sainsbury’s now has to revive two battered businesses at great cost.

The City expects Sainsbury’s to follow a 16% earnings decline in the year to March 2016 with a 3% dip next year, leaving the business dealing on P/E ratings of 11.3 times and 11.1 times respectively. And a predicted dividend of 10.6p per share through to the close of 2017 creates a chunky 4.6% yield, even if this represents yet another dividend cut.

But like Premier Farnell, I believe investors should continue to avoid the company. The competition from both discounters and premium chains continues to intensify, leaving Sainsbury’s little choice but to keep slashing costs at the expense of earnings. And I have little faith in the firm’s ability to resurrect Argos given its continued failure to turn around its own core grocery business.

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Royston Wild has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.