This week’s good start for the FTSE 100 (FTSEINDICES: ^FTSE) has taken a bit of a step back today, with a fall of 34 points to 6,479 by early afternoon. But the UK’s top-tier index does seem to be creeping back up towards the 13-year record set on 22 May, of 6,876 points — only 397 points to go!
But even if the FTSE is faltering, there are plenty of companies setting new individual records. Here are three from the various indices achieving just that:
Shares in Reckitt Benckiser Group (LSE: RB) soared to a 52-week high of 4,986p today, taking them up nearly 40% over the 12-month period — and that’s pretty good going for a $35bn FTSE 100 giant.
The firm, which owns a large number of cleaning, health and other household brands, has been growing its earnings per share (EPS) year-on-year and steadily lifting its dividend. But that strong share price rise will make it look a bit overpriced now to some, as full-year forecasts actually suggest no EPS growth this year and put the shares on a price-to-earnings (P/E) ratio of over 18. With an expected dividend yield of only around 3%, is the strong share price the result of a retreat to safety in these volatile times?
If you want a business that’s rarely considered “safe”, you wouldn’t be far out choosing the fickleness of the fashion trade. But that hasn’t stopped the share price of online clothes retailer ASOS (LSE: ASC) from more then doubling over the past 12 months, to touch on a high of 4,453p yesterday afternoon — so far today it’s down on that, at 4,350p.
When we look at growth shares like this, we’re getting into seriously stratospheric P/E multiples — and though analysts are forecasting a 60% rise in EPS for ASOS this year, that still leaves the shares on a P/E of 90! To put that into some perspective, earnings would have to grow more than sixfold to bring that down to the FTSE’s long-term average of 14. Either that, or the share price would have to fall.
Hikma Pharmaceuticals (LSE: HIK) shares hit a 52-week high of 1,100p this morning, and are 3p down on that just after midday — still up 24p on the day so far. After an interim update in May, a further announcement this week that “…all of our businesses have continued to perform well” and a prediction of a 17% rise in revenue for the year have helped push the share price up more than 60% over the past year.
Current forecasts put the shares on a forward P/E of over 20, but if Hikma turns out to be a good growth company with a few years of rising earnings ahead of it, it could turn out to be a bargain.
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> Alan does not own any shares mentioned in this article.
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