3 FTSE Shares Hitting New Highs: Melrose Industries PLC, Sports Direct International Plc And KCOM Group PLC

The FTSE 100 (FTSEINDICES: ^FTSE) has been slipping further and further from the 13-year high of 6,876 points set in May, and at one stage today it looked like it might be set for a fifth week of losses in a row.

But Monday’s 93-point gain, together with a recovery this afternoon to take the FTSE just 2 points down to 6,466 by late afternoon, mean we might see an up week after all.

But if the FTSE is still a long way from a new 52-week high, plenty of individual shares are setting records every day. Here are three from the various indices up in the clouds this week:

Melrose Industries

Engineering turnaround specialist Melrose Industries (LSE: MRO) saw its shares close on a new 52-week high of 301.8p last Thursday, and it pushed up against it again yesterday to close just a penny short at 300.8p — and this morning the price briefly touched 301.4p.

Last week’s rise was due to strong first-half results, showing revenue more than doubling to £1.02bn and pre-tax profit gaining similarly. Revenue and profits are erratic for Melrose over the short term, given its business model, but the City is currently forecasting two years of rising earnings per share (EPS).

Sports Direct International

Sports Direct International (LSE: SPD) shareholders have had a great year, with their shares gaining more than 120% to today’s 697.5p — and they touched on a 52-week high of 700p earlier in the day.

Results released in July showed a fourth year in a row of rising EPS after the crunch year of 2009, and we have more than 20% per year forecast for the next two years. There should also be a return to dividends for the current year, albeit with a modest yield of around 0.5% for now.

The rising shares have come at a price, mind, and they’re now on a forward P/E of 22.

KCOM Group

Our third is telecoms provider KCOM Group (LSE: KCOM), which reached a 52-week high today of 89.35p before slipping back a little to 88.9p. Over the past 12 months we don’t have anything special, with a gain of just over 10% not even keeping up with the FTSE. But that does represent a recovery from a slump toward the end of 2012, and the shares are on an undemanding P/E of 12 for the year to March 2014.

KCOM has been a decent dividend payer in recent years, and the low share price valuation puts the currently-forecast full-year dividend at a yield of 5.7%. Are KCOM shares undervalued? I think so.

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