LONDON -- I've just trawled the market to find FTSE 100 shares trading at no more than 8% above their lowest price of the 12 months -- and found 14 names.
Here are the 10 largest and my thoughts on five of them.
|
Company |
Price (pence) |
Market Cap (million pounds) |
% vs. 52-Wk. Low |
P/E (forecast) |
Yield (%, forecast) |
|---|---|---|---|---|---|
|
Royal Dutch Shell (RDSB) |
2,187 |
138,086 |
4.5 |
8.1 |
5.5 |
|
BHP Billiton |
1,833 |
97,554 |
7.3 |
11.5 |
4.1 |
|
Rio Tinto |
2,808 |
51,890 |
6.0 |
7.9 |
4.1 |
|
Imperial Tobacco (IMB -0.88%) |
2,346 |
22,888 |
5.5 |
11.2 |
4.9 |
|
Anglo American |
1,463 |
20,391 |
2.3 |
11.0 |
3.7 |
|
Carnival (CCL -0.83%) |
2,147 |
16,651 |
6.5 |
20.4 |
3.3 |
|
Tullow Oil |
1,004 |
9,117 |
7.8 |
21.5 |
1.2 |
|
Antofagasta (ANTO 1.26%) |
922 |
9,090 |
7.3 |
13.1 |
2.7 |
|
Wm. Morrison Supermarkets (MRW) |
263 |
6,111 |
6.3 |
10.2 |
4.8 |
|
Aggreko |
1,658 |
4,453 |
7.1 |
17.7 |
1.6 |
|
Petrofac |
1,301 |
4,429 |
3.8 |
10.5 |
3.3 |
|
G4S |
245 |
3,432 |
3.1 |
11.3 |
3.8 |
|
Amec |
1,000 |
2,970 |
7.7 |
11.3 |
3.9 |
|
EVRAZ |
128 |
1,708 |
0.6 |
60.5 |
2.5 |
Royal Dutch Shell
Titan blue chip Shell has trailed the market in the last 12 months. While the FTSE 100 is 18% up during that period, Shell has risen just 3%.
Shell, however, pays a substantial dividend. The total payout for 2012 was $1.72 per share, which supports a 5.1% yield at today's price. The average FTSE 100 share yields just 3%.
There has been a little weakness in the price of crude oil this year. A barrel of brent crude costs 2% less than it did at the start of the year and is 4% cheaper than it was three months ago.
Shell is forecast to earn $4.21 per share this year. That's a P/E of 8.1 at today's price.
Antofagasta
Resources companies need favorable changes in the metal markets to help grow their revenues. So, although Antofagasta's recent Q1 results confirmed its copper and gold volumes were up, the fall in realized prices led to a 15% sales decline.
Fears over a slowdown in the Chinese economy are being blamed for the hit to metal prices and the shares of resources companies in general. The effect of lower prices on profits is clear from Antofagasta's last announcement: A 20% fall in the price of copper, combined with an increase in costs, produced a 30% decline in EBITDA.
This performance leaves forecast earnings per share for the year of $1.10 looking unlikely. If the outlook for metal prices does not improve then Antofagasta shares will likely fall further in 2013.
Imperial Tobacco
Cigarette companies are finding it increasingly difficult to market and sell cigarettes in their long-standing markets. Plain-pack cigarettes are expected to be mandated in Ireland in the New Year, while Canada is monitoring the effectiveness of plain-pack legislation in countries where it has already been introduced. I expect the U.K. government is doing likewise.
If you believe that Big Tobacco can sidestep this legislation by selling to emerging markets, then think again. Anti-tobacco laws are catching on fast. Jamaica is moving toward a ban on smoking in public places, while lawmakers in Botswana and Tanzania are taking steps to protect the public from the risks of tobacco consumption.
Imperial shares trade on a P/E of 11.2 times forecast earnings for the year.
Wm. Morrison Supermarkets
News that Morrisons has moved into online and convenience sales has not provided the fillip to the share price that I had expected. With the shares today back down at around 260 pence, they are showing attractive value characteristics again.
Morrisons' shares are currently priced at 10.2 times forecast earnings for the year. They also come with the prospect of a 4.8% dividend yield.
The supermarket's proposed online and convenience operations will help revenues, and bring Morrisons' offering to the same channels as its competitors.
However, Aldi and Lidl are still taking sales from Morrisons at the cheap end of the market. Meanwhile, J Sainsbury and Waitrose are doing likewise at the top. Those trends will have to be arrested for Morrisons' shares to rise significantly from here.
Carnival
Shares in cruise operator Carnival have fallen 15% in the last three months alone. Unfortunately for shareholders, the shares don't look attractive value yet.
According to the available forecasts, Carnival shares are today priced at 17.1 times last year's earnings and 20.4 times the forecasts for 2013. The decline in profitability is forecast to be followed by large growth next year, putting the shares on a 2014 P/E of 14.4 times the average estimate.
The forecast dividend yield for Carnival is 3.3%, close to average for a FTSE 100 share.
Noises from the company will have to improve to prevent further falls. Meeting the 2014 estimate I feel is key to this share's current valuation.
Investing in out-of-favor shares can yield big returns if their fortunes improve.
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