Why ARM Holdings plc, Tate & Lyle PLC And J D Wetherspoon plc Should Beat The FTSE 100 Today

ARM Holdings plc (LON: ARM), Tate & Lyle PLC (LON: TATE) and J D Wetherspoon plc (LON: JDW) all shine.

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A handful of positive updates from FTSE 100 (FTSEINDICES: ^FTSE) companies has helped send the top tier index up 40 points to 6,637 in morning trading, despite a slight wobble in Chinese economic figures for July. We’re also awaiting statistics from France and Germany, which are expected to be positive, despite the woes still faced by their eurozone partners.

Which individual shares are helping to boost the London market today? Here are three from the various indices that are pulling ahead:

ARM Holdings

It was interim results time for ARM Holdings today, and investors were pleased enough to send the share price of the chip designer up 29p (3.2%) to 927p. Revenue for the six months to 30 June was up an impressive 27% to £341.5m, with normalised pre-tax profit up 37% to £176m (although reported profit plunged 23% to £82.1m) and normalised earnings per share (EPS) up 47% to 10.19p. The interim dividend got a 26% boost, to 2.1p per share — but before you rush out to spend it, bear in mind it’s only a return of 0.2%.

The ARM share price did seem to run ahead of itself earlier this year, reaching a peak of 1,111p in May (taking the prospective P/E up to 53) before falling back to 752p a month later. Back up to today’s level, the shares are on a forward P/E of 43 now.

Tate & Lyle

Tate & Lyle (LSE: TATE) released a first-quarter update this morning, and the share price responded with a 20.5p (2.5%) jump to 844p — it’s now up around 30% over the past 12 months. Although an unusually cold spring impacted on beverage consumption, adjusted operating profit for the quarter was still in line with expectations and full-year outlook is unchanged — the firm says it expects to “deliver another year of profitable growth“.

Tate & Lyle has delivered EPS growth for the past five years and is forecast to continue to do so for the next two. There has also been a steadily rising dividend year-on-year, though it does only yield a fairly average 3.2% or so.

J D Wetherspoon

A pre-close update from J D Wetherspoon (LSE: JDW) sent the pub operator’s shares up 39p (5.8%) to 707p this morning, after figures came in ahead of expectations. Total sales for the 11 weeks to 14 July rose by 6.2%, with like-for-like sales up 3.5%. The firm says it is “now on track to achieve a slightly better outcome […] than previously anticipated” for the full year.

Forecasts before today suggested a 3% rise in EPS, putting the shares on a P/E approaching 16, so that’ll be upgraded a little now. The dividend is expected to rise by 1.5%, but that would provide a yield of only around 2%. Full-year results are due on 13 September.

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> 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.

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