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The forward look from The Share Centre w/c 30 Jan 2012
Sheridan Admans, investment research manager at The Share Centre, gives his thoughts on what to expect from companies announcing results w/c 30 January 2012.
Tuesday
Babcock Trading update
The last update painted an improving picture, with an attractive pipeline of potential contracts. Investors will be hoping that this can be rubber stamped, possibly with news of more contract wins. Any comments on the future defence policy, an important part of the group’s business, will also be worth noting
We currently list Babcock as a BUY
ARM Holdings Q4 interim results
ARM Holdings’ technology is used in more than 95% of the world’s mobile handsets and over a quarter of all electronic devices. However, Intel is attempting to challenge ARM’s monopoly by recently signing up Motorola and Lenovo to use its chips in their hand held devices. Admittedly, both Motorola and Lenovo only command about 4% of global market share, however the switch from the older style mobile phones to the smart phone is still in its early stages. Smart phones are experiencing about 27% global penetration, so still a great deal to play for.
Analysts expect licence growth to be a little slower in 2012 as there seems to be no obvious catalyst to drive significant growth in the markets. We are also anticipating a continued slow down in consumers’ spending, at least for the first half of 2012, as companies’ IT departments hold back on spending.
ARM Holdings has strong cash flow and royalty pipeline, however it is trading on a forecast P/E multiple of 52 times next year’s earnings. So for now we recommend investors wait for some weakness in the price before buying.
We currently list ARM as a SELL
Other companies reporting today include:
Vedanta Q3 production report – BUY,
Xstrata full year production report – HOLD,
National Grid interim management statement - HOLD
Wednesday
ICAP trading update
The company’s share price has been falling steadily over the last 12 months and shows no signs of abating. A decline in trading volumes and general uncertainty in the financial sector has hit confidence in the group. It will be interesting to see if the company is able to hint at some light at the end of the tunnel. The market will also be looking for signs that activity levels are set to pick up.
We currently list ICAP as a HOLD
Other companies reporting today include:
Antofagasta Q4 production report - SELL,
Imperial Tobacco interim management statement - HOLD,
United Utilities Q4 production report - BUY
Thursday
Updates on developing drugs are always the first thing investors look for. Other issues such as US healthcare reforms, patents on existing drugs and European price cuts will also be of interest. There has also recently been news on joint ventures in Asia. We expect specific financial guidance for the year ahead and shareholders may focus on the company’s dividend policy and share buyback program
We currently list AstraZeneca as a HOLD
Compass Group interim management trading statement
Compass rival Sodexo reported better than expected results in early January, which has raised expectations on Compass’ results. We anticipate Compass to report good figures as demand for catering services in the global market still looks good.
We expect Compass to continue on the acquisition trail in 2012, continuing to focus on strengthening its balance sheet as well as focusing on organic revenue growth in its existing operations.
We currently list Compass Group as a BUY
Friday
Companies reporting today include BT Q3 results - BUY
Economic Diary
Economic announcements for the w/c 30 January 2012
PMIs for UK manufacturing, construction and services, January – CIPS/MarkIt
Last month the PMI covering UK manufacturing rose, but at 49.6 was still consistent with contraction. The PMI covering construction saw a strong improvement, hitting 53.2, and the business activity index for the services rose to 54, a five month high. Any score over 50 is considered to suggest growth. The weighted average for the three indices in December was 53.2, from 51.2 in November. Overall, the indices suggested mild growth for the UK during the final quarter of last year, whereas the initial estimate from the ONS pointed to a 0.2% contraction in GDP. But did the indices continue to improve in January?
US Employment Situation, January 2012 – BLS
Last month the US employment situation report was encouraging. There was a 200,000 increase in non-farm employment during the month, and the US unemployment rate fell to 8.7%, a three year low. This was better than expected. The consensus is for a more modest increase in January, but will the report provide another surprise on the upside?
Other economic announcements include:
30 January
- US Personal Income, December – BEA
31 January
- US Consumer Confidence Index, January – Conference Board
- Lending to Individuals, December 2011 – BLS
- Sectoral Breakdown of Aggregate M4 and M4 Lending, December 2011 – BLS
- EU Unemployment, December – Eurostat
1 February
•Manufacturing ISM Report On Business, January – ISM
•Flash Estimate Euro area inflation, January – Eurostat
•National Population Projections , 2010-based extra migration variants – ONS
•Markit Eurozone Manufacturing PMI, January – Markit
•UK PMI manufacturing, January – CIPS/Markit
2 February
- US Productivity and Costs, fourth Quarter 2011 – BLS
- Foreign Direct Investment, 2010 MA4 – ONS
- UK PMI construction, January – CIPS/Markit
3 February
- US Employment Situation, January 2012 – BLS
- Non-Manufacturing ISM Report On Business, January – ISM
- Insolvency Statistics, Quarter 4, 2011 – ONS
- Markit Eurozone services and composite PMI – January
- UK PMI services, January – CIPS/Markit
THIS DATA IS PROVIDED BY THE SHARE CENTRE. THIS IS NOT INTENDED TO CONSTITUTE AN OFFER OR AGREEMENT TO BUY OR SELL INVESTMENTS.
Risk Warnings:
Investing in general, and the products and services mentioned above may not be suitable for all: if in doubt, individuals should seek independent financial advice. The value of investments and the income from them can go down as well as up and investors may not get back their original investment. Past performance is not a reliable indicator of future performance.
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Back2012-01-27 11:56:47 © Moneyextra.com