LONDON -- The FTSE 100
The truth is that it can't, and whatever this blunt tool is doing, individual companies in the FTSE indexes are just going their own ways. Here are three whose shares the FTSE should beat today.
TT Electronics crashed 15.5% to 142 pence on the release of interim figures that show a big slump in profits. The electronics component maker saw pre-tax profit slide to 12.5 million pounds from 20.8 million pounds at the same stage last year -- although excluding exceptionals left a figure of 13.3 million pounds, unchanged from last year.
But despite highly competitive market conditions, the company's revenue only fell a little -- to 271.2 million pounds from 281.8 million pounds -- and it actually firmed up its operating margin from 5.4% to 5.6%. Net debt was cut dramatically from 24.2 million pounds to 7.3 million pounds.
With forecasts suggesting a prospective price-to-earnings ratio of 9.8 for the full year and a 3.2% dividend yield -- improving to 8.1 and 3.8%, respectively, for next year -- could the shares be a touch oversold now? They just might be.
Spirax-Sarco Engineering fell 5.8% to 1,941 pence after revealing a 15% slump in interim pre-tax profit to 51.7 million pounds and a 14% fall in earnings per share to 46.3 pence. However, after adjusting for non-operational items, the pump manufacturer recorded a much more modest 4% fall in profit and 3% drop in EPS, and it raised its half-time dividend by 8% to 16 pence per share -- and whichever earnings figure you go on, that payout is well-covered.
Chief executive Mark Vernon told us the second half has "started well with stronger organic sales growth of 10% in July" and made positive comments about full-year performance.
Bringing up our trio of shares that fell on interim results, Clarkson slid 4% to 1,264 pence after the shipping-service group told us that pre-exceptional pre-tax profit had fallen to 11 million pounds from 13.5 million pounds at the interim stage in 2011. Statutory pre-tax profit, though, was up a bit at 14.7 million pounds from 13.5 million pounds, and basic EPS came in at 54 pence (vs. 52.6 pence). The interim dividend was maintained at 18 pence per share.
Considering the global slowdown and fall in demand for shipping services, this performance seems decent, and the company has 76.4 million pounds in net cash on its books (up from 71.1 million pounds), so there's clearly no need for panic. And with forecast dividend yields of 4.1% this year and 4.2% next, which should be well-covered, the long term is looking fine to me.
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