FTSE Shares That Soared and Plunged This Week

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LONDON -- After last week's strong progress, there was little real news to affect the FTSE 100 (INDEX: ^FTSE  ) this week, and the markets got back to worrying about Chinese commodity demand. That led the index of top U.K. stocks to slip back by 63 points (1%) to end the week at 5,853 points -- not that Chinese demand was any different this week from last, or will be any different next week.

But whatever the short-termers are worrying about, individual stocks were moving.

United Utilities (LSE: UU.L  )
Water and sewage provider United Utilities gained 50 pence for a 7.3% rise to 722 pence in the week that it issued a trading update for the six months to September. The update told us to expect a decent underlying performance for the year, with half-year results due to be released on Nov. 28.

But it was bid rumors that really helped drive the price up, with some market observers suggesting that an offer of more than 900 pence per share might be on the cards. Whether a bid does surface, the attraction is clear -- forecasts put this year's dividend at 5%, with 5.2% predicted for next year.

Trinity Mirror (LSE: TNI.L  )
Newspaper group Trinity Mirror, meanwhile, continued the dramatic rise that started with the ousting of ex-boss Sly Bailey and the appointment of a new chief executive Simon Fox, with the price gaining another 7 pence (15%) to end the week at 53 pence.

The stock price has now almost doubled since its 27 pence levels of July, and it is on a forecasted price-to-earnings ratio of only 2 for the year to December -- but it is still more than 90% down on the heady heights of 2005.

Volex Group (LSE: VLX.L  )
Volex Group, the maker of electrical products, was one of the U.K.'s biggest fallers on the week, losing a hefty 93 pence (35%) to fall to 172.5 pence. The cause was a shock profit warning, citing a "a recent unexpected change in forecast demand from the Company's largest customer." Volex downgraded its full-year expectations and now predicts no operating profit growth this year.

If we assume similar profit levels as last year, it looks like the shares will be on a forward price to earnings ratio of around 6.5, which looks cheap -- but the market will now be fearful of possible further problems.

Ocado (LSE: OCDO.L  )
Online supermarket Ocado released an interim update this week, and the market responded by dumping the shares -- they lost 10 pence (14%) to fall to 64 pence on the week. The three months to Aug. 5 brought in a 10% rise in sales over the same period last year, to 163 million pounds, with year-to-date sales for the first three quarters up 11% and profit margins "preserved."

But the company has yet to make a profit and is expected to just break even this year -- and the fear is that the opening of its second warehouse still might not be enough to get profits up enough to justify the current market capitalization of around 350 million pounds. The shares are currently trading for about a third of their 2010 IPO price.

What now?
As usual, this week's FTSE trading provided some large share-price movements -- and perhaps some buying opportunities. Indeed, legendary investor Warren Buffett has spent more than $1 billion buying the shares of one of the U.K.'s most successful FTSE large caps.

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Alan Oscroft owns no shares mentioned in this article. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days. The Motley Fool has a disclosure policy.

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10/25/2016 8:25 AM
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