Volex (LSE: VLX) crashes, and JD Sports (LSE: JD) falls on Blacks losses.
The FTSE 100 (UKX) is falling back a little today, down 38 points to 5,856 points by lunchtime, after slipping back a little from last week's six-month high. The fall in the UK's index of blue chips today was largely led by financials.
Across the various indices, companies in other sectors also opened the day lower. We take a look at three shares the FTSE should beat today...
Volex
Volex (LSE: VLX) shares were slammed this morning, down 79p (31%) to 176p, after the electrical products maker released a surprise profit warning. Blaming "a recent unexpected change in forecast demand from the Company's largest customer in its Consumer sector and the continuing adverse macro-economic conditions", the firm downgraded its full-year expectations and now expects no operating profit growth over last year.
Assuming the same earnings per share as last year, the current price puts the shares on a forward price-to-earnings (P/E) ratio of only 6.5, which looks cheap -- but that's assuming there will be no further bad news.
JD Sports
JD Sports Fashion (LSE: JD) fell 12p (1.6%) after interim results showed hefty losses from its acquisition of Blacks Leisure in January. Revenue for the six-month period rose 26.4% to £556m, but an anticipated £10m loss related to Blacks helped knock pre-tax profits down to £2.88m from £20.1m at the same stage last year.
But like-for-like operating profit fell by a much more modest 8.2% to £14.9m, and prospects for Blacks are apparently good, with chairman Peter Cowgill telling us that "the Board believes that the Group is well positioned to deliver results that are within the range of current expectations".
Debenhams
Despite confidence returning to the high street, Debenhams (LSE: DEB) saw its strong pre-close trading update result in a small price fall, albeit only half a percent to 99p, in early trading.
Reporting good like-for-like sales growth, online sales up 40% and further debt reduction, the update told us to expect pre-tax profit in line with expectations and ahead of last year. Despite the share price having gained more than 60% over the past 12 months, those expectations still put the shares on a forward P/E of under 11, falling to under 10 for next year, and there's a dividend of around 3% forecast.
If you don't like news of falling shares, investing in safe dividend-paying companies the Neil Woodford way is a good way to go. The free Motley Fool report "8 Shares Held By Britain's Super Investor" takes a look at some of his major holdings. Click here to get your free copy, while it's still available.
If you prefer the oil and gas sector as a place for your cash, the latest Motley Fool report, "How To Unearth Great Oil & Gas Shares", is just for you. It's free for a limited time, so click here to get your personal copy.
Further Motley Fool investment opportunities:
> Alan does not own any shares mentioned in this article.
