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Why Severn Trent Plc, Debenhams Plc and IG Group Holdings plc Should Beat The FTSE 100 Today

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Yesterday’s cheeriness appears to have worn off, and the FTSE 100 (FTSEINDICES: ^FTSE) is down 27 points to 6,596 approaching midday. The mining sector has not had a great time this morning, and the banks are also slipping on the day the government sold off a chunk of Lloyds Banking Group.

But some shares are on the up. Here are three from the various indices that look like beating the FTSE today:

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Severn Trent

Severn Trent (LSE: SVT) shares have been in the doldrums for a while, with fears that the regulator could end up cutting into the water company’s profits and dividends. But sentiment seems to have returned recently, after the latest round of price-setting has been accepted reasonably happily by both parties, and the price has been recovering.

Up 60p (3.4%) today to 1,818p, the shares have now put on 129p (7.6%) in just over a week. Although there is a forecast drop in earnings this year, analysts are still confident enough to predict a 4.6% dividend yield this year and 4.9% next. But is a forward P/E of nearly 20 a bit too high? It could be.


Shares in Debenhams (LSE: DEB) picked up 1.2p (1.2%) to 104p this morning, after a trading statement ahead of full-year results told us of a 2% rise in like-for-like sales over the year with a 1.9% gain in the last 10 weeks. Total sales are up 2.5% over the year and 2.1% in the final period.

Modernised stores apparently performed well, and online sales are up by a very nice 46.2%. There was, however, a note of caution from chief executive Michael Sharp, who said “Looking forward, we are confident in our strategy but are not expecting any rapid recovery in consumer sentiment and the marketplace remains highly competitive“.

Results are due on 24 October.

IG Group

Spread-betting specialist IG Group Holdings (LSE: IGG) saw its shares gain a modest 5.5p (0.9%) to 600p, on the release of a first-update for the quarter to 31 August. Overall revenue for the quarter is up 15% from the same period a year ago, to £93.6m. And although the firm’s number of active clients fell 5%, it enjoyed a 21% rise in revenue per client from the remaining 95%.

But we were reminded that last year saw a weak Q1 and a strong second half, so we should not assume too much about full-year expectations from today’s figures.

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

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