Why GlaxoSmithKline plc, Resolution Limited And Rio Tinto plc Should Beat The FTSE 100 Today

GlaxoSmithKline plc (LON: GSK), Resolution Limited (LON: RSL) and Rio Tinto plc (LON: RIO) are on the way up.

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Finally, we have a bit of life in the FTSE 100 (FTSEINDICES: ^FTSE), with the UK’s main index up 32 points to 6,606 by late morning. The insurance sector is putting in a good day so far, and the recent mini-recovery among the miners has not run out of steam. UK inflation for July was pretty much bang on expectations too, which helped steady nerves.

But which shares are on the way up? Here are three helping support the FTSE 100 today:


GlaxoSmithKline (LSE: GSK) (NYSE: GSK.US) shares gained 20.7p (1.2%) to 1,686p this morning on the news that the HIV treatment Tivicay has been given approval by the US Food and Drug Administration in 50mg tablet form. The drug is made by HIV specialist ViiV Healthcare, which is part-owned by GlaxoSmithKline, and the approval comes after a number of phase III trials.

GlaxoSmithKline shares have recovered well from a pessimistic 2012, though the price has been erratic of late — but it’s still up around 13% over the past 12 months. Based on forecasts for the year to December, the shares are on a P/E of a distinctly average 14, with a predicted 4.4% dividend yield on offer.


First-half results sent Resolution shares up 11p (3.4%) to 335p, taking them up more than 50% over the past year. The life insurer saw pre-tax profit rise 17% £191m, with earnings per share (EPS) also up by 17%, to 13.26p. The firm, however, kept its interim dividend stable at 7.05p per share.

The gains were largely driven by new business in the UK, which rose by 41% to £89m. Internationally, things remained stable, with new business coming in at £21m against £22m a year previously. Chief executive Andy Briggs said that “We continue to make excellent operational progress in line with the clear and consistent strategy and value agenda of the Group“.

Rio Tinto

The recent rise in Chinese factory output has given the mining sector a boost this week, and Rio Tinto (LSE: RIO) (NYSE: RIO.US) gave us one of the biggest FTSE 100 risers by the time of writing today, with its shares up a further 64p (2%) to 3,257p. The shares had been on a slump since the start of 2013, losing around 30% between February’s peak and late June. But in the six weeks since, the price is back up 26% to bring it pretty much flat over the past 12 months.

There’s a small fall in EPS forecast for the full year, but a predicted return to earnings growth in 2014 would drop the P/E down to under 9. Meanwhile, there’s a likely dividend yield of around 3.7% on offer.

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> Alan does not own any shares mentioned in this article. The Motley Fool has recommended shares in GlaxoSmithKline.

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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