LONDON -- May was a less bullish month for FTSE 100 companies than the previous couple of months, with caution creeping back for the final two weeks. We still saw a number of companies whose shares did well over the month, but the big question is which of them look like they have further to go.
I've chosen five that gained during May and that I think still have more to give to shareholders over the long run:
Marks & Spencer
After a few years of going nowhere, the Marks & Spencer Group (LSE:MKS) share price was always going to recover, right? Well, it has been rising in recent months, but it took on fresh impetus after the company's annual results on May 21. Over the whole of the month, the shares gained 62 pence (15%) to end on 471 pence.
Pre-tax profit did fall 14% with earnings per share down 10%, but that was pretty much as expected, and overall sales were up 1.3%, with that all-important multichannel sales figure up 17%. Business seems to be picking up overseas, too, with international sales up 4.5% -- businesses owned in China and India did well. There's earnings growth forecast for the next two years, with the shares on a forward price-to-earnings ratio of 14 for 2014, and a dividend yield of 3.8% is expected. May might just have been the turnaround month.
TUI Travel (LSE: TT) shares gained 45 pence (14%) during May to end the month on 359 pence -- and they've more than doubled over the past 12 months. Emerging from the depths of the financial crisis, TUI turned in two years of earnings growth in 2011 and 2012, and analysts are forecasting a further 10% per year for the next two years, putting the shares on a forward P/E for this year of 12.5 -- it falls to 11.5 for 2014. The dividend has been rising, too, with a yield of 3.6% expected this year.
The future? Well, TUI this week announced a commitment to invest $12 billion in buying new Boeing aircraft, which are more fuel efficient and environmentally friendly.
Talking of planes, easyJet (LSE:EZJ) has had another great month, with its share price climbing another 149 pence (13%) to 1,266 pence. And again, easyJet looks to be facing the future with enthusiasm, snapping up 25 pairs of arrival and departure slots at Gatwick airport from Flybe Group for 20 million pounds.
Also similarly to TUI shares, the easyJet price has risen by 150% over the past 12 months, but it's still not on an obviously excessive forward valuation. In fact, its P/E based on September 2013 forecasts is 15, and that drops to 13.5 for 2014. I wouldn't bet against easyJet shares going on to even better things over the next few years.
The insurance sector has had a turbulent year, with a handful of famous dividend cuts. But May wasn't such a bad time, and we saw shares in motor insurer Admiral (LSE:ADM) pick up 57 pence (4.4%) to close the month on 1,338 pence. Despite having fallen from higher levels earlier in 2013, Admiral shares are still up 25% over the past 12 months, which is pretty much bang on the overall FTSE performance.
The firm has shown steady earnings growth, with a 16% rise reported for the year to December 2012. For this year, there's a further earning rise predicted, but of more interest is Admiral's dividend -- there's a total yield of 6.3% forecast with the shares on a P/E of a modest 13.5. The caution is that about half that payment is expected to be in the form of a special dividend -- but Admiral has declared a special dividend every year since it joined the stock market in 2004.
With the way the mining sector is going these days, I just have to include one with a view to a long-term recovery, and it's going to have to be Antofagasta (LSE:ANTO). OK, the share price is actually down on its end-of-April close, but since its May 2 low of 879 pence, it has regained 67 pence (7.6%) to end the month on 946 pence.
Antofagasta's woes have been largely due to the falling price of copper, over which the firm has no control. But production volumes are up, and recent forecasts are suggesting an upturn in earnings again for 2014 -- and there will surely be a recovery in metals and minerals prices, won't there?
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