Why Serco Group plc, Ultra Electronics Holdings plc And Gemfields PLC Should Beat The FTSE 100 Today

Serco Group plc (LON: SRP), Ultra Electronics Holdings plc (LON: ULE) and Gemfields PLC (LON: GEM) are all up.

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The FTSE 100 (FTSEINDICES: ^FTSE) started well this morning, but quickly turned tail and stands 26 points down at 6,262 by early afternoon. Results today have been mixed, with HSBC holding the index back, but there is  no real macroeconomic news of note driving the markets at the moment as the FTSE hovers around two-month highs.

Which shares are beating the FTSE today? Here are three that look set to do it:

Serco Group

The announcement of a major new contract in the US sent Serco Group shares up 7p (1.1%) to 643p this morning, and up around 6% over the past 12 months. The new deal, with the United States Department of Health and Human Services, will see the international services firm providing processing support for new health benefit exchanges. Starting with a $115m one-year agreement with further one-year options, according to Serco the contract has a potential total value of up to $1.25bn.

Serco has grown its earnings and dividends year-after-year, and is forecast to do the same this year and next — on a forward P/E of 14.7, dropping to 13.4 for 2014, it has to be worth further investigation.

Ultra Electronics

Ultra Electronics Holdings (LSE: ULE) has seen its shares soar by more than 25% over the past year, with a nice boost of 36p (2%) today from first-half results taking the price to 1,877p. Although revenue for the six months to 30 June fell by 0.7% to £367.7m, reported pre-tax profit gained 4.8% to £39.6m (with adjusted profit up a more modest 0.7%). Underlying earnings per share rose 1.5% to 59.5p, and the firm announced a 4.1% rise in its interim dividend to 12.7p per share.

Chief executive Rakesh Sharma told us that “the security & cyber, transport and nuclear energy markets, now 46% of the Group’s business, remain strong with good trading in the period“, but that “procurement process constraints and uncertainty in both the US and UK defence markets currently impact order flow and reduce visibility“.


A final quarter update from Gemfields (LSE: GEM), the coloured gemstone producer focused on Zambia and India, sent the firm’s shares up 1p (4.4%) to 23.5p today. Gemfields, which also acquired Fabergé in January 2013, reported a 42% rise in emerald and beryl production from its Kagem emerald mine, with a combination of better grades and lower production costs.

Chief executive Ian Harebottle said “The outcome of our auction of higher quality rough emeralds, which took place after the end of the financial year, yielded record per carat prices and is clearly indicative of the continued increase in demand for consistently supplied high quality coloured gemstones

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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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