Archive
Where to get a 9 per cent yield, the tale of two Aim shares plus is a reader's high cash holding a good thing?
Income-starved investors know by now that they can leave no stone unturned in the quest for a decent yield on their investments. If you haven't already been to view property investment trusts, it's worth noting their attractive income pull. According to the Association of Investment Companies the average yield for these trusts is around 7 per cent. One trust in particular stands out for its near-10 per cent yield. Not only does it boast an enticing yield, the shares are also trading on a large discount. Is the dividend sustainable? Well, with the exception of 2008, the company has consistently paid covered dividends since listing in 2005. Elsewhere Graeme Davies compares two of the most popular retail punters' plays on the Alternative Investment Market (Aim) which are suffering wildly contrasting fortunes right now. One, once the darling of the Aim market, has put its investors through a rollercoaster ride over the past few years but now looks to be close to rehabilitation. In contrast, a more recent Aim darling is still travelling south at pace after a torrid year which has seen its shares lose 80 per cent of their value. We also review a risk-averse reader's portfolio: is his high cash holding justified? And Lee Wild reports on how dealmakers expect little rest in 2012 as the scramble for growth driving aerospace and defence M&A shows little sign of easing up.
Tech giants going cheap, Lloyds prefs could be back on, and gas exporters get a boost
The climbing of Apple's share price to $509 this week, and the planned flotation of Facebook at a valuation of $100bn are, if nothing else, evidence of how technological innovations dominate the modern world and how gadgets, from smartphones to tablets, and social media websites, have succeeded in permeating the waking moments of millions of people. That huge interest in and appetite for technology, and its translation into cash profits, lies behind Apple's stunning stockmarket performance over the years. But the company's shares are still trading at an undemanding multiple. And on a PE basis, two other tech giants, Microsoft and Google, are also looking cheap. Malar Velaigam analyses why the shares are trading on such low multiples and picks out our top buys from the big names in the sector. Meanwhile there could be good news on the way for long suffering Lloyd's investors: Julian Hofman reports on how payments on preference shares could be reinstated after a nearly four year long hiatus. Elsewhere Mark Robinson looks at the transformation of the global gas export market as a result of growing demand from Asia and technological change; Moira O'Neill warns that decision making at any stage of the pension process should never be taken lightly and we update our view on San Leon.
Outperforming shares, early Isa planning, Shire, Hargreaves and the Trader
George Osborne must wish he had Apple's - or even Vodafone's - problem: so much cash they can hardly know what to do with it. As the chancellor digests the news that Moody's has put the heavily indebted, but still triple A rated, UK on a downgrade threat, Apple sits on a cash pile of $97.6bn which analysts reckon could surpass $200bn by 2013. Its share price has topped the $500 mark (delivering a healthy profit for anyone who followed John Hughman's tip to buy the shares last October - we'll have more on that tomorrow). Meanwhile mobile telecoms operator Vodafone, which yesterday confirmed a possible interest in Cable & Wireless Worldwide, announced in its interims last week that it expects its free cash flow this year to be around 拢6.5bn, and that's not including the 拢2.8bn dividend received from Verizon Wireless in January. Our columnist Bearbull had already decided last month that Vodafone, "on the verge of becoming a cash-generating machine of major proportions", was a must-have for any high-yield equity portfolio including his own Income Portfolio. But where can other must-have shares be found? Algy Hall has used a growth screen to track down four shares all boasting rising earnings, rising dividends and rising share prices. Elsewhere Maike Currie offers advice on getting ready for the new Isa season, we report on results from Shire and Hargreaves Lansdown and Dominic Picarda explains his reaction to the latest market movements.
Greece, a great value small cap, Barclays and press tips
Greece has stepped back from the brink of uncontrollable economic chaos with politicians voting through a deeply unpopular austerity bill. That paves the way for the next injection of bailout cash, but the threat of a social explosion still lingers in the air. One survey I glanced at this morning indicated that just 5 per cent of respondents think the passing of the bill will lead to Greece rebalancing its finances and calm Euro worries, while 92 per cent think either the Greek crisis will drag on or that the country's troubles will get worse. I wonder how many Greeks blame their current troubles on Germany and how many lean towards the view that the crisis is at least partly a home-grown disaster? Because even if yesterday's rioters came largely from the ranks of anarchists, anger and social unrest could spiral as the package of job losses and pay cuts is implemented, prolonging the pain and increasing the chances of an exit from the EU. Away from the birthplace of democracy, here in the UK the Confederation of British Industry predicts that growth will resume 鈥� albeit at a fragile rate of just 0.2 per cent in the first quarter - while our companies editor Simon Thompson finds a small cap which boasts contract wins, a strong profit recovery and cost savings. He recommends buying in now ahead of a share price rerating expected soon. John Adams reports on Barclays results, and we've got our usual round-up of press tips and the Trader's daily comment.
Bargain shares 2012
Amid all the debate about national economics, austerity-versus-growth, whether Greece should be booted out the eurozone, whether China will have a hard landing and so on, here's a reminder: you invest in companies, not economies. And the best way to invest for the long term is not try and second-guess what the market's going to do, or which economy will grow the fastest. It's to buy shares in quality companies at decent prices. As Warren Buffett is fond of saying, "price is what you pay, value is what you get". Mr Buffet's' mentor was an academic called Benjamin Graham, who's known these days as the father of value investing. His seminal book "The Intelligent Investor" - first published in 1949 - remains a must-read work on the subject. The Intelligent Investor forms the basis of Simon Thompson's bargain shares portfolio, which has beaten the market in 11 out of the past 13 years, in some cases handsomely. Today, Simon updates on last year's selection, and provides 10 new value stock picks. In an exclusive video presentation, he also runs through the methodology behind the selection process. If you were worried by the aggregate performance of shares over the past decade, don't be - new research out this week shows that shares remain the best long-term savings product by a long way. We've our usual round-up of share, fund and bond tips - and keep an eye out for the latest blue-chip results, including BG, Diageo, Rio Tinto and Rolls-Royce.
QE party extended, plus income shares, fund tip, latest results
We've written before about the belting start to the year that stock markets have enjoyed around the world - the FTSE 100 is not far from reclaiming the 6000 point level and the S&P 500 gave a bullish 'golden cross' signal recently (The Trader looks at how reliable these have proven down the years). We've been pretty clear about the main reason for the resurgence of risk - central bank largesse, especially on the part of the European Central Bank. The ECB has been tossing so much money about that many European companies cannot issue bonds quickly enough to soak it up. The Bank of England joined the party today, announcing another 拢50bn-worth of quantitative easing over the next three months. That leaves only the Fed on the sidelines, although possibly not for long. How long this risk rally can last is our key theme for today. The Trader thinks there'll be a correction, but it will prove a buying opportunity as key indices challenge their 2011 highs. Chris Dillow is not so sure, while John Hughman points out that the 2011 rally has echoes of 2009's 'dash for trash' - bombed-out retail shares have been among the main beneficiaries. Mr Bearbull, meanwhile, is running the rule over more income shares to fill the hole in his income fund. He finds one that will certainly make life more exciting: it's cyclical and Greek. Perhaps, with interest rates on the floor for three years now, he should also take a look at this week's fund tip - an investment trust focused on Asian income. Lots of big company results are out today - check out our Shares page for the latest headlines. Finally, we take a detailed look at the issue of fund charges - you need to make sure you are keeping investing costs to an absolute minimum, but the industry doesn't exactly make it easy. ONE MORE THING: ITN is looking for people who have seen their annuity income slashed by low gilt yields/base rates, and would be prepared to talk about it on camera. If that's you, email me at jonathan.eley@ft.com immediately and I'll pass your details on to the producer there.