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Why Rio Tinto plc, Bellway plc And Shanks Group plc Should Beat The FTSE 100 Today

Trading started off with light volumes today, but there was enough to push the FTSE 100 (FTSEINDICES: ^FTSE) up 48 points to 6,555 by mid-morning. There are apparently more hints emerging from the US that a budget deal is in the pipeline, and that’s provided a bit of optimism so far — though a solution is going to be found sooner or later, for sure.

Individual share gains are spread across the FTSE indices this morning. Here are three bringing us good news:

Rio Tinto

News of a “strong third quarter” sent Rio Tinto (LSE: RIO) shares up 109p (3.5%) to 3,193p this morning. The big highlight was a 23% increase in copper producti0n over the same quarter a year ago, but iron ore production is also up 2% and shipments are up 4% — in fact, it was a record quarter for iron ore production.

Aluminium production is up 3%, and coal production is mixed depending on grade but overall volumes were higher. Over the nine-month period, increases are broadly in line with the quarter.

Forecasts before today suggested a 3% drop in earnings per share (EPS) for the year, putting Rio Tinto shares on a P/E of around 10 with a predicted dividend yield of 3.7%. It sounds like things might now turn out a bit better than expected.


The UK’s housebuilders have been on the up of late, in response to developments in the government’s ‘Help to Buy’ scheme, with Barclays the latest to get on board. Full-year results today gave Bellway (LSE: BWY) an extra boost — its shares picked up 43p (3.1%) to 1,429p, taking them up 50% over the past 12 months.

From a 10.6% rise in revenue to £1.1bn the company extracted a pre-tax profit of £141m, up 34% on a year ago. EPS is up 36% to 89.3p, and the dividend has been hiked by 50% to 30p per share for a yield of 2.1% on the current price.

Bellway sold 8.2% more homes, totalling 5,652, and enjoyed a 3.4% rise in its average selling price to £193,025. Net debt was slashed during the year, from £40.6m to just £5.8m.

Shanks Group

Waste management specialist Shanks Group (LSE: SKS) told us today that it is to sell the bulk of its UK solid waste business to Biffa, and announced its plans to exit the sold waste business altogether by disposing of the remainder.

The plan, which the firm says is part of its “strategy of focusing on markets where it has a sustainable competitive advantage and can deliver attractive returns“, pleased the punters and was rewarded with a 4.8p (5.1%) share price rise to 99.6p.

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