Why Severn Trent, Globo, and Anglo American Should Lag the FTSE 100 Today

LONDON -- The FTSE 100 (FTSEINDICES: ^FTSE  ) is back above the 6,400 level, up 1.23% to 6,414 as of 9:35 a.m. EDT. The index of top U.K. shares has now fallen 6.3% from the 13-year peak of 6,876 points set on May 22.

But not every stock is joining in on the market's rally. Here are three that look set to slip behind the FTSE 100 today.

Severn Trent
Water company Severn Trent today rejected a third takeover bid from LongRiver Partners, causing the share price to drop 4.5% to 1,977 pence. The offer, of £22 per share, did not account for the payment of a 45.51 pence-per-share final dividend and effectively valued the shares at £21.54. What's more, the latest proposal was only 3.5% better than the previous offer, which had been quickly rejected.

Once again, the Severn Trent board "unanimously concluded that the Proposal continues to fail to reflect the significant long term value of Severn Trent or to recognise its future potential." LongRiver Partners said it may now walk away.

Globo (LSE: GBO  )
Telecom software specialist Globo released a trading update this morning and saw its shares drop 3.9% to 44.5 pence -- but that's really not bad at all, seeing as the price is still up more than 150% over the past 12 months.

Trading so far this year is said to be strong, with Globo's international mobile business now accounting for more than 85% of revenue. For the year to December 2013, current forecasts put Globo's shares on a P/E of only about 10.5, even after that huge share-price appreciation.

Anglo American
The FTSE's big miners are all slipping today, with Anglo American continuing to be one of the sector's heaviest casualties. Exposed to the iron ore market, Anglo has seen its share price drop more than 30% over the past year after falling a further 2.6% this morning on disappointing news from China, where it seems growth for the second quarter will be slower than previously expected.

Are our miners bargains now? Well, Anglo American is on a forward P/E for this year of less than 11, falling to 9.5 based on expectations of a bit of a profit rebound for 2014.

Finally, reliable dividends can more than compensate for the day-to-day ups and downs of share prices. So how about a company that's offering a 5% yield and could be set for some nice share-price appreciation, too? It's the subject of our brand-new report "The Motley Fool's Top Income Share For 2013," which you can get completely free of charge -- but it will only be available for a limited period, so click here to get your copy today.


Read/Post Comments (0) | Recommend This Article (3)

Comments from our Foolish Readers

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.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2480024, ~/Articles/ArticleHandler.aspx, 11/27/2014 11:44:31 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement