Stock market forecasting is mostly a mug’s game. But a lot of companies that I rate as undervalued will deliver results in March. These three in particular have caught my eye.
Insurer Aviva (LSE: AV.) will deliver FY22 results on 9 March. The company should announce a share buyback.
A Q3 update said: “Our dividend guidance remains unchanged and, as previously announced, we anticipate commencing additional returns of capital to shareholders with our 2022 full-year results.”
A return could, alternatively, take the form of a special dividend. And that’s a reasonably common way to deal with erratic earnings in the insurance sector.
But forecasts put the price-to-earnings (P/E) at under nine for 2023. And that surely makes Aviva shares look too cheap for the board to ignore. I expect the buyback to be reasonably substantial.
My prediction? Positive results will fail to lift the Aviva share price appreciably, as there seems to be too much inertia holding back financial sector stocks right now. The price might even fall, and I expect Aviva to remain a cheap buy.
We’re due full-year results from Vistry Group (LSE: VTY), the housebuilder formerly known as Bovis Homes, on 22 March. I predict something better than expected.
The Vistry share price has recovered well since October’s depths, gaining 55%. So some confidence is creeping back into the sector since last year’s grim sentiment took its toll.
Yes, mortgage rates are rising. Yes, property prices are falling. And yes, the whole housing market is under pressure. But there are two reasons why I think Vistry could report a better start to 2023 than expected.
One is that there’s still pent-up demand from the Covid years, when buying a new house became a distant dream. And the country still faces a major, chronic, housing shortage.
I might be wrong about 2023. But I still rate housebuilders among the Footsie’s best long-term investments.
I predict further share price weakness for Synthomer (LSE: SYNT) on 28 March when we get full-year results.
The shares have fallen more than 50% since last May. This is essentially due to “reduced demand in Synthomer’s construction and coatings end markets,” as the company said in its December update.
Debt is mounting too, although the company recently confirmed the $262m disposal of its laminates, films and coated fabrics businesses.
What do I expect from the results? I hope for more clarity on the firm’s banking agreements, with some reasonable liquidity. And I think we’ll get it.
I see Synthomer as a potential long-term recovery buy. But I fear further pain first.
Please don’t take any of my predictions too seriously, as they’re really just speculation. I also haven’t properly examined the risks of any of these three, which potential investors really should do.
But, I can’t help thinking I’d do well to buy all three of these right now, and hold for the long term.