3 FTSE Shares Crashing to New Lows

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LONDON -- The FTSE 100 (FTSEINDICES: ^FTSE  ) closed the day up 1% to 64 points as optimism over the future of American and Japanese economic-stimulus policies trumped the loss of the U.K.'s "AAA" credit rating. The U.K.'s top-tier index has closed above 6,400 just once -- could we be in for a repeat?

But even if the FTSE is soaring, there are plenty of individual shares that are not. Here are three plumbing new depths.

Stobart (LSE: STOB  )
Stobart Group shares closed on a 52-week low of 90.2 pence on Friday, though they recovered a bit to reach 92.5 pence today. The shares are down 40% from their early 2010 levels after earnings growth came to a halt and turned to decline. We now have a further fall of around 30% forecast for the year to February 2013, with the shares on a price-to-earnings ratio of 14.

But with earnings forecast to start rising after that, and with 6.7% dividend yields on the cards, is this a time to get in for a recovery? It might be, but the dividend will be barely covered this year, and it could be unwise to consider it safe.

Lonrho (LSE: LONR  )
Few miners have had it as hard as Lonrho, whose shares closed Friday at a new low of 6.6 pence -- they're at 6.79 pence as I write. That's down 48% from a 12-month high of 13.25 pence set in April last year. The most recent slump, a fall of 22%, came as a result of a weak fourth-quarter trading statement released on Feb. 4.

There's a loss per share currently expected for the year ended December 2012, with only modest earnings of 0.24 pence per share forecast for 2013, putting the shares on a prospective P/E of 29.

Bloomsbury (LSE: BMY  )
Bloomsbury Publishing shares have been on a slide since the start of the year, taking them down to a 52-week low of 102 pence today. The price was soaring as high as 148 pence in August, so it's down 29% since that peak.

Forecasts for the year to February suggest a 10% fall in earnings per share, putting the price on a P/E of 8.7 with a 5.3% dividend yield expected. The dividend should be twice covered, and earnings are forecast to stabilize over the next two years, so is there are bargain here? Well, it was Harry Potter that made Bloomsbury its money, and the future of print publishers is by no means certain, so it wouldn't be without risk.

Finally, what's the best way to deal with share-price falls? One way is to focus on dividends, which can be spent or reinvested according to your needs -- whether investing for income or growth, good old cash is always welcome. And that's why I recommend the brand-new Fool report, "The Motley Fool's Top Income Share for 2013," in which our top analysts identify a share that they believe will provide handsome dividend income for years to come. But it will be available for only a limited period, so click here to get your copy today.

Read/Post Comments (1) | Recommend This Article (3)

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On March 04, 2013, at 10:21 AM, strawberrynob wrote:

    LONR isn't mining company at all. You are thinking of Lonmin (LMI), which was spun off from Lonrho years ago.

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Related Tickers

9/30/2016 11:35 AM
BMY $154.00 Down -2.25 -1.44%
Bloomsbury Publish… CAPS Rating: No stars
LONR $0.00 Down +0.00 +0.00%
Lonrho CAPS Rating: No stars
STOB $166.75 Up +4.00 +2.46%
Stobart Group Ltd. CAPS Rating: No stars
^FTSE $6899.33 Down -20.09 -0.29%
FTSE 100 CAPS Rating: No stars