3 More FTSE 100 Shares You Should Have Bought In July: Marks and Spencer Group Plc, Tesco PLC And Kingfisher plc

Marks and Spencer Group Plc (LON: MKS), Tesco PLC (LON: TSCO) and Kingfisher plc (LON: KGF) are storming up.

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The FTSE 100 (FTSEINDICES: ^FTSE) climbed 405 points (6.5%) in July, to 6,621, so anyone with a good spread of investments would have done well. But are there any sectors that enjoyed notable success? Well, retail can be a good indicator of economic well-being, with people often starting to spend more (and invest more in retail shares) when they’re feeling optimistic.

And our retailers did indeed have a decent month. Here are three from the top flight whose shareholders were rewarded well last month:

Marks & Spencer

Marks & Spencer (LSE: MKS) shares climbed 54.5p (12.6%) to end July on 485p, taking them up around 45% over the past 12 months as investors become more convinced by the department store chain’s turnaround plans. A first-quarter update told of a rise in group sales of 3.3% and, as a sweetener, we heard that General Merchandise (ie non-food) sales actually rose, albeit by only 0.5%.

UK sales were up 2.7%  with like-for-like up 0.3%. International sales gained 8.7%, and internet sales via MKS.com soared by 29.9%. Chief executive Marc Bolland told us that “We continue to make good progress with our plans to transform M&S into an international, multi-channel retailer“, though the company did say it remains cautious about rest of the year and will “continue to manage the business tightly“. We should have first-half results on 5 November.

After the past year’s price rise, M&S shares are finally back up to a forward price-to-earnings (P/E) ratio of 14.5 based on full-year forecasts, after having been depressed for years. There’s also a 4% rise in the dividend expected, which would be its first lift in three years and would provide a yield of 3.8%.


Tesco (LSE: TSCO) (NASDAQOTH: TSCDY.US) shares have had a pretty rocky year. The UK’s biggest supermarket looked like it was returning to former glories as 2013 got off to a good start, but the price slumped again by June to wipe out most of the year’s gains. Since then the shares are on the way back up, thanks to a 36p (10.8%) rise in July to end the month at 367p.

There has been no real news since June’s first-quarter update which told of a 2.7% growth in sales excluding petrol, and we have until 2 October to wait before we get first-half results. The year is still forecast to be flat for earnings, although there’s a small rise in the dividend expected — it should be around twice-covered and should yield about 4.2%. That would put the shares on a P/E of just over 11, a bit below the sector average — second-biggest J Sainsbury is on a forward P/E of 12.4, but with better growth forecast.

Will Tesco get back to its old winning ways? As I have it in the Fool’s Beginners’ Portfolio, I think so, and there is a return to reasonable earnings growth forecast for 2015.


Our third for today is Kingfisher (LSE: KGF),  the owner of the UK’s B&Q and Screwfix brands, and a number of European outlets including Castorama. Spending on DIY and home improvement took a bit of a hit during the downturn, but the Kingfisher shares held up pretty well. They were pretty flat over the 12 months to April, but since then they’ve been rocket-propelled — up 110p (38%) between 1 April and 31 July, putting on 54.5p (16%) last month to finish on 397.5p.

A final decision in Kingfisher’s favour in a French tax case dating back to 2003 helped, and the firm will recognise an exceptional credit of about £145m in this years results. And a positive Q2 pre-close update added extra impetus, with total sales for the quarter up 5.2% and like-for-like up 2.5%. The better weather helped, and chief executive Ian Cheshire said that “We are on track to deliver a first half in line with our expectations“.

Full-year forecasts suggest a 6% rise in earnings per share, but after the recent price rise that does put the shares on a P/E of 17, which some might think a bit high for this kind of business — but earnings are predicted to keep rising.

Finally, if you’re looking for top quality investments in the UK’s biggest and best companies, which 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.

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