Wimpey (LSE: TW), Inmarsat (LSE: ISAT) and Halfords (LSE: HFD) are all having a great August.
The FTSE 100 (UKX) is still hovering around the 5,800 level, down just 22 points on 5,825 at the time of writing. That's still close to the four-month high of 5,860 it achieved last week, largely thanks to recovering banks and miners.
Today I'm taking a look at three constituents of the FTSE indices that have performed well this month. They're not the biggest risers, but they're companies that I think have a strong story behind them and which could go a lot further...
The UK's housebuilders are looking more and more like they have passed the bottom, and that includes Taylor Wimpey (LSE: TW), which has seen its price rise by 6p (14%) to 50p since the end of July. And that comes on top of a rise from a 2011 low point of 28p, for an overall gain of 79%.
The firm returned to profit in 2011, and current forecasts suggest an 80% rise in earnings per share (eps) to 3.8p for the year to December 2012, with a further rise of around 25% for 2013. That puts the shares, based on today's price, on a forward price-to-earnings (P/E) ratio of 13 for this year, falling to 10.5 for next year. And the dividend is growing once again -- only 1.6% forecast for this year, but 2.4% next.
With all of the major housebuilders having built up their land banks during the crisis years, I think the sector is looking good for the long term -- Taylor Wimpey isn't the screaming bargain it was a year ago, but it still looks cheap.
Inmarsat (LSE: ISAT) is an interesting company, with its shares up 64p (13%) to 556p in August so far. The satellite mobile communications specialist had suffered for a while, as its offerings were slower to capture market share than many had hoped. But Inmarsat has been capitalising on its key niche of late -- marine communications, where conventional mobile phones just won't do.
And when its interim report on 3 August told us that total maritime sector revenue was up 12.7% to $201m, the shares flew. The company's new FleetBroadband service, and its newest range of pricing options, got most of the credit. The shares had fallen to 391p in May, all the way from 2010's peak of 818p, so the current run represents a gain of 42% since that bottom.
Forecasts are still decent, with a 5% dividend expected this year and 5.4% next, even if the prospective P/E does stand at around 15.
Halfords (LSE: HFD) has been staging a bit of a recovery recently, after hitting a 189p bottom on 25 July. Since then, the shares are up 40p (21%) to 229p, with a 12.5% rise since the start of August.
The auto parts and cycle seller, and operator of Halfords Autocentres, has been hit pretty hard by the spending slowdown, although it has kept its dividend up right through the slump -- and it has always been adequately covered by earnings.
Forecasts for March 2013 suggest a dividend yield of a massive 8.7%, though earnings are expeted to fall by about a quarter, and the cover won't be great. But with 8.4% expected for 2014, the shares would still look cheap even with a small dividend cut.
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> Alan does not own any shares mentioned in this article.