Why Imperial Tobacco Group PLC, Shire PLC and Royal Dutch Shell Plc Should Beat The FTSE 100 Today

The FTSE 100 (FTSEINDICES: ^FTSE) fell 0.7% to 6,672 points today after a number of companies gave disappointing outlooks. Before today, the index had risen for six straight sessions, but the year’s longest winning streak is over, with Rolls Royce and Tate & Lyle leading the market down.

The top faller was Tate & Lyle, which lost 15%, while Rolls Royce fell by 12%. Even Lloyds, after its return to profitability, fell nearly 4%. A number of leading FTSE 100 members like HSBC, Centrica and Direct Line will be reporting final results in the coming weeks.

The outlook wasn’t all bad, and these are the shares that should beat the market today:

Imperial Tobacco

imtThe world’s fourth largest cigarette company reported today that it expects modest earnings growth in 2014, despite falling demand for tobacco. The shares of Imperial Tobacco (LSE: IMT) are up 5% to 2,338p as the group maintains momentum in growth markets in the Middle East and Asia, while it anticipates “at least a 10% increase” in its dividend for the full year.

The company, which makes the Lambert & Butler and Davidoff brands, also thinks it’s spotted an opportunity in electronic cigarettes, and will attempt to catch up to rival British American Tobacco by introducing its first two e-cigarette products later this year. The traditional cigarette business is under pressure as the number of smokers dwindles below 20% in the UK.


shireThe pharmaceutical group Shire (LSE: SHP) reported strong quarterly results today, adding 49p to 3,190p. Since taking over last April the new chief executive, Flemming Ornskov, has overseen a 50% rise in the group’s share price. In 2013 earnings grew by 23% and the group expects growth to continue at this rate.

Revenues rose in 2013 by 12% to £2.9bn and the dividend was increased by 15% to 11p. In 2014 growth should benefit from the recent $4.2bn acquisition of rare disease company ViroPharma. Also part of the growth strategy is the simplifying of operations and cost cutting.


royal dutch shellShell’s (LSE: RDSB) (NYSE: RDS.B.US) recent profit warning didn’t really hit the company hard. The setbacks, such as rising exploration costs and weak refining conditions, were already known to the wider market. As such its shares didn’t drop by much, underlining its position as a steady rock in the stock market.

The shares were up around 1% to 2,282 during early trading this morning, after news that the company was poised to announce the sale of three assets in the North Sea. Stepping up asset disposals is part of a new strategy and the company hopes to divest £9bn as a result.

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> Mark does not own shares in any company mentioned. The Motley Fool has recommended Shire.