Why NEXT Plc, GKN Plc And The Weir Group PLC Should Beat The FTSE 100 Today

NEXT plc (LON: NXT), GKN plc (LON: GKN) and The Weir Group PLC (LON: WEIR) pull ahead.

| 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) finished down on the day yesterday, but today it’s bouncing back a little and is up 16 points to 6,576 at the time of writing, after a few positive earnings updates have been coming in. In the macroeconomic world, there’s not much unexpected happening — fears about China have gone off the boil of late, the next tranche of Greece’s bailout has passed without drama, and we’re awaiting the next central bank updates.

But individual shares are moving. Here are three that look set to beat the FTSE today after releasing good news:

NEXT

I was saying recently how highly I rate NEXT (LSE: NXT) as a business, and today we see the share price rising further — it’s up 122p (2.5%) to 5,024p by mid-morning. The driver today is an upbeat first-half trading statement, telling us that total brand sales were up 2.3%, which is around the middle of the firm’s earlier guidance of 1% to 4%. That does include the firm’s end-of-season sale period, which carried 20% less stock than last year — prior to that, sales for the period were up 3.7%.

The company is, apparently, seeing volatility in sales over shorter time scales. But averaged out it seems that sales trends are quite stable, and NEXT has seen fit to narrow its sales growth guidance for the full year to somewhere between 1.5% and 3.5%. Pre-tax profit is expected to be around £635-675m, for a growth of 2.2% to 8.6%, with underlying earnings per share (EPS) up between 8% and 15%. The firm also expects its share buybacks for the year to total £250-350m.

GKN

GKN (LSE: GKN) shares also climbed this morning, up 19.3p (5.9%) to 346p, after the engineering  group announced an adjusted pre-tax profit rise of 5% for its first-half, to £278m. That came from a 12% rise in sales to £3.87bn, though underlying EPS did fall by 3% to 13.8p due to a higher tax rate. Reported figures, however, were lower, with pre-tax profit dropping 52% to £134m, “primarily due to foreign exchange rate changes impacting the mark to market value of foreign exchange contracts“.

With free cash flow of £77m, GKN saw fit to lift its interim dividend by 8% to 2.6p per share. If the same rise happens for the final payment, we should be seeing around 7.8p per share for a yield of 2.3%, though analysts are forecasting a little more than that.

Weir

We had a first-half report from Weir Group (LSE: WEIR) as well, and it sent the engineer’s shares up 75p (3.6%) to 2,152p in early trading. Although revenue for the period did fall by 10% to £1,198m and pre-tax profit declined 14% to £193m, that was no surprise, with chief executive Keith Cochrane saying “Weir has delivered a first half performance in line with our expectations, despite challenging market conditions“.

Looking forward, Weir shares are on a relatively modest P/E of 13.5 based on December 2013 forecasts, even though the price has gained around 25% over the past 12 months.

Finally, if you’re looking for investments that should take you all the way to a comfortable retirement, I recommend the Fool’s special new report detailing five blue-chip shares. They’ll be familiar names to many, and they’ve already provided investors with decades of profits.

But the report will only be available for a limited period, so click here to get your hands on these great ideas — they could set you on the road to long-term riches.

> 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

Businesswoman calculating finances in an office
Investing Articles

Is BP’s 6.7% dividend yield good value after the recent share price fall?

Despite the fluctuating oil price and BP's volatile shares, City analysts predict strong ongoing annual dividend payments ahead.

Read more »

Hand of person putting wood cube block with word VALUE on wooden table
Investing Articles

Up 42% from their 12-month low, is it time for me to buy this much-fancied FTSE growth stock after a 2% dip?

This FTSE 100 distribution firm achieved a lot in the past year and has good earnings growth prospects, but is…

Read more »

Investing Articles

Here’s the HSBC share price forecast through to 2026

Shares in this FTSE 100 bank have surged in 2024, but what’s next for the HSBC share price? Dr James…

Read more »

Pink 3D image of the numbers '2025' growing in size
Investing Articles

Can Rolls-Royce shares continue to outperform in 2025?

Stephen Wright thought Rolls-Royce shares were undervalued heading into 2024. After a 90% rally, is this still the case with…

Read more »

Investing Articles

Here’s what Warren Buffett says is ‘always a bad investment’

Working out what to invest in can be difficult. But there’s one asset that Warren Buffett says long-term investors should…

Read more »

Investing Articles

Up 40%! Is it too late for me to grab some shares of this skyrocketing FTSE 100 giant?

With the share price soaring, our writer’s kicking himself for not buying this FTSE 100 share when he reported on…

Read more »

Investing Articles

Down 54%, here’s one of my favourite FTSE 100 bargain shares for 2025!

The FTSE 100 remains packed with value shares despite its strong showing this year. Here's one fallen angel I think…

Read more »

Snowing on Jubilee Gardens in London at dusk
Investing Articles

A cheap FTSE 250 share I think could fly during the Santa Rally!

The FTSE 250 has historically delivered its best results during December. Value shares like this one could be in prime…

Read more »