Why Marks & Spencer Group Plc, A.G. Barr plc and Dixons Retail PLC Should Lag The FTSE 100 Today

Marks & Spencer Group Plc (LON: MKS), A.G. Barr plc (LON: BAG) and Dixons Retail PLC (LON: DXNS) all slip.

| 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.

The FTSE 100 (FTSEINDICES: ^FTSE) is climbing further today, with rises across the mining sector making a nice change from the almost incessant gloom afflicting the industry. Today’s optimism appears to be based on an improving outlook for the UK economy, but fickle as sentiment is these days, if someone in China should cough tomorrow the FTSE will probably head South again.

But which companies are failing to keep up with London’s top index? Here are three looking like they can’t make it:

Marks & Spencer

Marks & Spencer shares lost 8.3p (1.8%) to 451p after the high-street giant reported a lacklustre first quarter. Although like-for-like UK food sales were up 1.8%, clothing and home goods are still struggling, with General Merchandise sales down 1.6% on a like-for-like basis. Online sales did gain 30%, but that only accounts for around 10% of total sales.

The firm’s outlook is not especially encouraging either, as we were told “we remain cautious about the outlook and continue to manage the business tightly”. All eyes will now be on M&S’s first-half results, which should be with us on 5 November.

AG Barr

AG Barr (LSE: BAG), the other half of last year’s planned merger with Britvic, saw its share price fall today, losing 17p (3.2%), after the Competition Commission ruled in favour of the now-lapsed link-up. But it seems more likely that it wasn’t the Commission result that disappointed Barr shareholders as much as comments from Britvic’s chairman Gerald Corbett, who appeared to pour cold water on any prospects for a new deal.

On the face of it, Barr’s shares do look a bit pricey on a forward P/E of more than 20 based on January 2014 forecasts — Britvic shares are on a more modest 16, with a better dividend yield of 3.5% expected.


Shares in Dixons Retail (LSE: DXNS) fell back a bit today, losing 2.6% to 42.3p, but that’s probably just a bit of profit-taking after full-year results released last month showed a return to growth. In fact, in one of the best post-crisis recoveries we’ve seen, Dixons shares have soared more than 130% over the past year.

With earnings per share forecast to grow by 33% and 25% for 2014 and 2015 respectively, the shares are on a forward P/E of over 21, dropping to 15. But if that growth can continue a bit further, today’s price could still turn out to be a bargain.

Finally, reliable dividends can more than compensate for the day-to-day ups and downs of share prices. So how about a company that’s offering a 5% yield and which could be set for some nice share price appreciation, too?

It’s the subject of our BRAND-NEW report, “The Motley Fool’s Top Income Share For 2013“, which you can get completely free of charge — but it will only be available for a limited period, so click here to get your copy today.

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

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.

More on Investing Articles

Bus waiting in front of the London Stock Exchange on a sunny day.
Investing Articles

At a record high, there can still be bargain FTSE 100 shares to buy!

The FTSE 100 closed at a new all-time high this week. Our writer explains why there might still be bargain…

Read more »

Asian man looking concerned while studying paperwork at his desk in an office
Investing Articles

After profits plunge 28%, should investors consider buying Lloyds shares?

Lloyds has seen its shares wobble following the release of its latest results. But is this a chance for investors…

Read more »

Abstract bull climbing indicators on stock chart
Investing Articles

Something’s changed in a good way for Reckitt in Q1, and the share price may be about to take off

With the Reckitt share price near 4,475p, is this a no-brainer stock? This long-time Fool takes a closer look at…

Read more »

Investor looking at stock graph on a tablet with their finger hovering over the Buy button
Investing Articles

This new boost in assets might just get the abrdn share price moving again

The abrdn share price has lost half its value in the past five years. But with investor confidence returning, are…

Read more »

Young Black man sat in front of laptop while wearing headphones
Investing Articles

As revenues rise 8%, is the Croda International share price set to bounce back?

The latest update from Croda International indicates that sales are starting to recover from the end of 2023, so is…

Read more »

Happy young female stock-picker in a cafe
Investing Articles

Q1 results boost the Bunzl share price: investors should consider the stock for stability

As the Bunzl share price edges higher, our writer considers whether this so-called boring FTSE 100 stock looks like a…

Read more »

Bus waiting in front of the London Stock Exchange on a sunny day.
Investing Articles

The top 5 investment trusts to buy in a resurgent UK stock market?

These were the five most popular investment trusts at Hargreaves Lansdown in April. And they're not the ones I'd have…

Read more »

woman sitting in wheelchair at the table and looking at computer monitor while talking on mobile phone and drinking coffee at home
Investing Articles

The smartest dividend stocks to consider buying with £500 right now

In the past few years, the UK stock market’s been a great place to find dividend stocks paying top yields.…

Read more »