Why Royal Dutch Shell Plc, Domino’s Pizza Group PLC And Spirent Communications Plc Should Lag The FTSE 100 Today

After a few days of dithering, the FTSE 100 (FTSEINDICES: ^FTSE) has hit full-on panic mode today, dropping 99 points (1.6%) to 6,205 by mid-morning. The ongoing political crisis in Portugal, after two key ministers have resigned in the wake of public opposition to austerity measures, has spread fresh euro-fears, and the latest data from the Chinese economy is not encouraging.

Which shares are being hit the hardest? Here are three from the various FTSE indices that are feeling the pinch:


It’s actually a bit early to tell if Royal Dutch Shell (LSE: RDSB) shares will beat the FTSE down today, but at the time of writing they’re running neck-and-neck with a loss of 33p (1.5%) to 2,151p. The only news actually looks good, with the oil giant has announcing the success of an exploratory well at Vicksburg in the Gulf of Mexico — maybe that part of the world just spreads fear amongst oil investors, or more likely the drop is just part of today’s general panic.

Shell shares are down around 5% so far over the past 12 months, but they’re on a forward P/E of only 8 with a 5.3% dividend yield forecast.

Domino’s Pizza

A second-quarter pre-close update sent shares in Domino’s Pizza Group (LSE: DOM) down 44.5p (6.7%) to 624p, despite total UK sales rising by 11.7% to £147.6m and like-for-like sales gaining 6.1%. Online sales are up too, and now account for 63% of the firm’s total UK deliveries. In other countries things also seem to be going well, with like-for-like sales in Ireland up 4.9% in the quarter, and in Switzerland up 6.2% — and the firm’s recent entry into the German market looks to be going well.

Forecasts for the full year suggest a 12% rise in earnings per share, but that does put the shares on a P/E of 28 — and even if that’s perhaps justified by future prospects, growth shares often do lead the sell-off when macroeconomic or political panic hits. Second-quarter and first-half results should be with us on 30 July.


Spirent Communications (LSE: SPT), the provider of communications analysis technology, told us today that trading in its second quarter was “mixed” — orders were up by 10% in the quarter, but revenue is expected to be down around $26m to $92.7m. And that comes after a fall in revenues in Q1 too.

All in all, it was enough to send the share price down 5.5p (4.2%) to 129p. The shares are now down more than 20% over the past 12 months, though current forecasts still put them on a forward P/E of nearly 19. Spirent’s interim figures are due on 1 August.

Finally, reliable dividends can more than compensate for the day-to-day ups and downs of share prices. So how about a company that’s offering a 5% yield and which could be set for some nice share price appreciation too?

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> Alan does not own any shares mentioned in this article.