Despite early panic over a possible reining-in of economic stimulus, which in the end didn’t happen, last week petered out to an overall gain of just 13 points for the FTSE 100 (FTSEINDICES: ^FTSE), which finished Friday on 6,596 points. The index of top UK shares has so far reversed that gain today, losing 18 points to 6,579 points approaching midday, as the reality that stimulus will inevitably be cut sooner or later might just be sinking in.
But which shares put in a good week last week? Here are three that would have served you well:
There was a bit of a “flight to quality” last week, with a good number of safe shares making some nice gains — including companies like Unilever and the utilities. One of the latter, water company Severn Trent (LSE: SVT), gained 87p (5%) to end Friday on 1,820p for the biggest gain of the sector, with United Utilities in second place with a 3.5% rise.
Severn Trent shares are up only around 5% over the past 12 months and are on a relatively high forward P/E of 20, but forecasts are suggesting a dividend yield of 4.4% — and with interest rates likely to remain low for some time yet, it’s understandable why that would look attractive.
It took a while after flotation for Ocado Group (LSE: OCDO) shareholders to start reaping benefits, but the price has risen five-fold in the past 12 months, including a 27p (7.2%) climb last week to 402p. Two recent events have helped inspire investors — the partnership with Wm Morrison Supermarkets to get their tardy online offering finally in motion, and a 16% rise in sales in its latest trading quarter.
Ocado’s first profits aren’t expected until 2014, and a P/E is meaningless at this stage, so valuing Ocado shares at the moment is not an easy job.
Shares in Esure Group (LSE: ESUR) crashed in early August after an interim results update warned of competitive pressure over pricing — though the insurer did announce a 15% rise in pre-tax profits and issued its first dividend.
But Esure shares got started on a nice recovery last week, with the FTSE 250’s biggest rise of 15.4% to end the week up 35p to 263p. Despite volatility in its early life as a quoted company, Esure might well provide good value — forecasts for its first full year suggest a forward P/E of 11 and indicate a 5.5% dividend yield.
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> Alan does not own any shares mentioned in this article. The Motley Fool has recommended shares in Morrisons.