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Why Mothercare plc, Fresnillo Plc and Marks and Spencer Group Plc Should Beat The FTSE 100 Today

The FTSE 100 (FTSEINDICES: ^FTSE) has risen for a fifth straight session this morning, up 0.8% to 6,645 points, as retailers report their fastest sales growth in four years. The housing market is heating up, which helped furniture become the best performing sector, while January was also a record month for deep discounts in stores. This marks a rebound for British sales after a poor December.

All eyes are now on Janet Yellen, the new chair of the US Federal Reserve, as investors await news on the pace of bond purchase trimming after mixed US jobs data.

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Whether this is a broad rally or merely a slight bounce as the downward trend continues remains to be seen.

Mothercare

MothercareThe shares of Mothercare (LSE:MTC) are on the up today, having risen by 5% to 265p during trading this morning. This comes after suggestions that Asda is considering a bid for struggling toy chain Early Learning Centre, which is owned by Mothercare. The 40-store chain was purchased by Mothercare for £85 million in 2007.

Perhaps more significant could be renewed rumours that Tesco may rekindle its interest in making a bid for Mothercare. Tesco is looking to fill vacated floorspace in its larger superstores, making them more interesting as “destinations” for customers to visit.

Mothercare has also partnered up with eBay as part of the website’s expanded baby and toddler category, and will be hoping that it can claw back some market share with a stronger on-line presence.

Fresnillo

Investors seem more willing to enter riskier areas, with mining shares helping boost the FTSE 100 today. Despite the company revealing mixed production results recently — with gold output dropping 10% year-on-year — investors seem willing to bet on Fresnillo (LSE: FRES), and the miner was cheered today as gold prices hit a three month high.

Fresnillo shares increased 33p to 895p as emerging market turbulence sees investors seeking out gold as a safe haven. The main driver of gold prices, though, appears to be China, which consumed 41% more gold in 2013.

Marks and Spencer

It appears that the UK economic recovery will hold, and despite Marks & Spencer (LSE: MKS) suffering 10 successive quarters of sales decline, its shares are up 3% to 485p today.

Marks and Spencer has invested heavily over the past decade — on store revamps, logistics, IT and overseas expansion — but analysts are suggesting that this investment is reducing. The group presently trades at 13 times earnings, and offers a prospective dividend yield of around 3.5%. Investors will potentially see higher dividends as capital expenditure falls.

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> Mark doesn't own shares in any company mentioned. The Motley Fool owns shares in Tesco.

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