Why Fresnillo Plc, Premier Foods Plc And Devro plc Should Lag The FTSE 100 Today

Fresnilo Plc (LON: FRES), Premier Foods Plc (LON: PFD) and Devro plc (LON: DVO) are some of the FTSE shares being crushed right now.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

While the FTSE 100 (FTSEINDICES: ^FTSE) recovers after yesterdays 127-point slide — it’s back up 81 points, or 1%, to 6,789 at the time of writing — not every company gets to take a deep breath and recover.

After releasing results today, several companies are trading down, in one or two cases pretty sharply.

 Fresnillo

FresnilloWe’ll start with Fresnillo (LSE: FRES), the leading faller on the blue-chip index, after the share price fell by 92p to 879p on the company’s full-year financials.

The miner, which operates the world’s largest primary silver mine, was significantly impacted by the decline in precious metals prices in 2013. To placate shareholders, the company recommended a special one-off dividend of $50m. That old trick.

 In addition, poor performance was attributed to lower gold production, which declined 10%, resulting from a legal dispute over explosive permits at the company’s Minera Penmont operations in Mexico.

 In total profit plunged 64% to $419m while revenue fell by 25% to $1.6bn.

 In response to this, the chairman Alberto Baillères, commented:

“The Group’s portfolio of profitable mines and development projects is expected to yield returns even in a low metal price environment. This reflects our long-term strategy of conservative organic growth based on a strong commitment to exploration and the development of efficient, low cost, world-class operations located in mining districts we know well.”

Premier Foods

Premier FoodsShares in Premier Foods (LSE: PFD) were down 6% to 132p, after the maker of Mr Kipling cakes, as well as other well known brands such as Ambrosia and Oxo, posted a 12% fall in profit to £140m.

It’s been a topsy-turvy old time for the food producer on account of the company’s liabilities. The shares dropped as low as 34p in 2011 with the market worrying over its debt and pension deficit — £1.3bn — while the rise of discount supermarkets, with their cheap own-brand products, has also done damage.

The firm has launched a capital restructuring plan aimed to “liberate” the group from heavy debt and boost business. £353m is hoped to be raised through a share placing and a rights issue.

Devro

DevroDevro (LSE: DVO)was the second leading faller today when it’s share price tumbled 9% on falling demand for its sausage casing products. The firm had been anticipating higher sales, so will this year cut production to prevent being stuck with goods it can’t shift.

In the UK total sales of sausages fell 5%, attributable to pork prices hitting an all-time high.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

> Mark does not own shares in any company mentioned. The Motley Fool owns shares in Devro.

More on Company Comment

Hand of person putting wood cube block with word VALUE on wooden table
Company Comment

Value has been building behind the Diageo share price

Despite the business growing, the Diageo share price first reached its current level just over 19 months ago and hasn't…

Read more »

Older couple walking in park
Investing Articles

5 stocks to buy for high and rising dividend income

I can see a host of shares to buy on the FTSE 100 offering me exceptional levels of income. Here…

Read more »

Young mixed-race woman looking out of the window with a look of consternation on her face
Investing Articles

I don’t care if FTSE 100 shares fall further, I’m buying them today

I'm happy to go shopping for FTSE 100 shares today, even though I accept that they could have further to…

Read more »

Happy young female stock-picker in a cafe
Investing Articles

Rolls-Royce shares are down 18% in a month and I’m finally going to buy them

Investors who bought Rolls-Royce shares have been repeatedly disappointed, but I'm willing to take a chance on them before they…

Read more »

Storytelling image of a multiethnic senior couple in love - Elderly married couple dating outdoors, love emotions and feelings
Investing Articles

How I’d invest £10k in a Stocks and Shares ISA today

Now looks like a good time to buy cheap FTSE 100 shares inside a Stocks and Shares ISA. These are…

Read more »

Black father holding daughter in a field of cows
Investing Articles

Today’s financial crisis is the perfect moment to buy cheap shares

I'm building a portfolio of FTSE 100 stocks by purchasing cheap shares whenever I see an opportunity. There's a good…

Read more »

Long-term vs short-term investing concept on a staircase
Investing Articles

I’d buy Tesco shares in October to bag their 5.4% yield 

Tesco shares have fallen lately but I think this makes them attractively valued for a dividend stock I would aim…

Read more »

Young mixed-race woman looking out of the window with a look of consternation on her face
Investing Articles

I would do anything to hold Diageo in my portfolio (but I won’t do that)

Diageo is one of my favourite stocks on the entire FTSE 100 and I'd love to hold it, but one…

Read more »