Today I am looking at three FTSE headline grabbers in Friday business.
With a much-awaited deal to solve Greece’s financial meltdown seemingly edging closer, shares in Vodafone (LSE: VOD) have understandably received a boost and the mobile operator was recently dealing 2.3% higher on the day. The firm’s reliance upon a strong eurozone is critical — Vodafone sources two-thirds of total EBITDA from Europe, so Athens’ newfound appetite to avert a continental crisis is great news.
The telecoms play has seen conditions improve steadily in Europe as consumer spending has picked up, while moves into the red-hot ‘quad play’ entertainment space have also turbocharged Vodafone’s sales outlook. When you factor in galloping data demand in developing markets — organic service revenues from the Africa, the Middle East and Asia Pacific region leapt 5.8% last year — in my opinion the London business emerges as a great growth pick.
Indeed, the City expects a 1% earnings uptick for the 12 months concluding March 2016 to advance to 15% in the following year. While it is true these figures produce hefty P/E multiples of 44.1 times and 36.8 times respectively, I believe Vodafone’s generous dividend policy more than offsets these expensive values — a prospective payment of 11.7p through to the end of 2017 results in a huge 5.1% yield.
Shares in biotech play ReNeuron (LSE: RENE) have gone gangbusters in end-of-week trading following news of a huge cash injection, and the firm was recently changing hands 18% higher. The stem cell researchers announced that they had raised £68.4m in a bid to fast-track its product to market, with superstar investor Neil Woodford giving ReNeuron the seal of approval by hiking his stake from just over a quarter to 36%.
The Guildford firm announced that the capital will be used to fund “core cell-based therapeutic programmes and new exosome nanomedicine programme in oncology” through to the first half of 2019, giving plenty of wiggle room in what is obviously a capex-heavy industry. And ReNeuron added that the funds — which it describes as the largest such investment in cell therapy so far this year — should push its stroke and retinitis pigmentosa programmes through to the market authorisation application stage.
Naturally the business of healthcare is a lumpy and expensive one, and as a result ReNeuron also announced today it had made a £10.3m pre-tax loss in the year to March 2015. But with several of its clinical trials making excellent headway, and the company now having the financial clout to really get its R&D operations trucking, I believe ReNeuron could explode higher in the coming years.
Cellular material producer Zotefoams (LSE: ZTF) also released its latest trading update in Friday business, although prices have so far failed to react and the stock was recently flat on the day. The Croydon company — which manufactures cross-linked block foams across a variety of applications, from packaging and toys through to clothing — announced that revenues are expected to have risen 8% in January-June.
In particular, sales at its MuCell Extrusion technology licensing arm are anticipated to have leapt 40% higher during the period, while revenues at its High-Performance Products division is predicted to have advanced 20%. With raw material prices also declining, the City expects improving demand to propel earnings 14% higher this year, and by another 19% in 2016.
These numbers create high P/E ratios of 27.7 times and 23.2 times for 2015 and 2016, however, while projected dividends of 5.7p and 6p for these years do not create eye-popping value, either — yields ring in at just 1.7% and 1.8% for these years. But beyond the medium term, Zotefoams’ market-leading expertise in niche products could make it a potentially barnstorming pick should demand remain resilient, helped by a planned expansions in Kentucky to boost manufacturing capacity.
According to one leading industry firm, the 5G boom could create a global industry worth US $12.3 TRILLION out of thin air…
And if you click here, we’ll show you something that could be key to unlocking 5G’s full potential...
It’s just ONE innovation from a little-known US company that has quietly spent years preparing for this exact moment…
But you need to get in before the crowd catches onto this ‘sleeping giant’.
Royston Wild has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.