5 Opportunities For The Week Ahead

Published in Investing on 7 September 2012

Full-year results are starting to roll in, and we look at a few worth closer inspection.

We now have a few full-year results starting to come through, as half-year interims start to tail off, and next week brings us some important updates that may well provide nice buying opportunities.

Here are some thoughts on a few companies you might like to subject to a bit of background research ahead of their announcements:


Full-year results from housebuilder Barratt Developments (LSE: BDEV) are due on Wednesday, and the sector is enjoying something of a recovery.

I had a quick look at the interim results from fellow builder Persimmon (LSE: PSN) earlier this week, and according to Barratt's recent pre-close update, we should expect something similarly good.

On 11 July, Barratt's told us to expect pre-tax profits up more than 150% over last year to around £110m, from sales that rose by 14% to £2.3bn after the completion of 12,637 homes. Margins are on the up, too, with an operating margin of 8.2% for the full year recorded, against 6.6% last year -- with the second-half margin reaching 9.5%.

Barratt's share price has more than doubled in the past twelve months, to today's 169p, but as of yet there is only a small recovery in the dividend expected -- hopefully Wednesday's update will tell us more on that.


In a related business, we have annual results from construction and civil engineering group Kier (LSE: KIE) scheduled for Thursday, and again the upcoming statement has been preceded by a positive update. Trading, we were told in June, was "resilient", and 85% of the company's forecast construction revenue for 2013 is already on its order books as "secured" or "probable".

The City is currently forecasting a dividend yield of more than 5%, and estimates put the shares on a price to earnings (P/E) ratio of 9. The shares have done well in the past few months, having risen 17% since the beginning of April to today's 1,330p, but current valuations suggest they could still be too cheap. More details of the company's outlook on Thursday could help cement that feeling.


Keeping to Thursday, we should enjoy annual results from Dunelm (LSE: DNLM), and if you want to see shares that have climbed a wall, look no further -- they are up more than 25% since late June, and 35% on the year, to 584p.

The household goods retailer, which trades as Dunelm Mill, gave us a pretty positive update in July, and has been a winner in the post-crisis stock-market recovery so far.

With the shares offering a modest dividend yield of 2.2%, according to forecasts, and sitting on a P/E of 17, they seem a bit toppy right now to me. But the long-term valuation should, I think, be based on the firm's future dividend policy, and that's what I'll be looking out for.


Pub chain JD Wetherspoon (LSE: JDW) is due to release full-year results on Friday and they will hopefully justify the recent share-price rally, which has seen the price soar by around 25% since the middle of May to today's 463p.

In July, the company said it had experienced a strong final quarter, buoyed by Jubilee and Euro 2012 celebrations, which helped boost total sales for the year by 9%, with like-for-like sales up 3%. A net 37 new pubs were opened, with 20-30 planned for next year. The firm also bought back 5.6 million shares during the year at a cost of £23m.

Looking forward to 2013, current forecasts suggest earnings growth of 6%, a forward P/E of 11 and a dividend yield of 2.9%.


I'm going to close today with a quick look at  Sinclair IS Pharma (LSE: SPH), a company I know nothing about. Why? Well, this is all about learning, and a lot of people do like a nice growth candidate from time to time. And we have full-year results coming on Thursday.

Sinclair is a fairly small company, with its shares priced at 26.5p for a market cap of a little over £100m. The firm is in a growth phase -- and it is valued accordingly. What does it do? Well, according to its web site, the group develops products "to treat wounds, dermatological and oral diseases through advanced surface technology and innovative delivery systems."

Sinclair's pre-close trading statement on 10 July reported a 56% rise in revenue to £51m, and the firm is expecting progress in emerging markets "in the near future". The company is really just on the verge of profitability, so traditional ratios don't mean much now.

But for investors looking for pharmaceuticals and biotechnology growth candidates, keep your eyes peeled on Thursday.

Oil & Gas

Finally, next week should see the usual batch of statements from the oil and gas sector. But sorting the big winners from the many losers in this industry can be hard for ordinary private investors.

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Further Motley Fool investment opportunities:

> Alan Oscroft does not own any shares mentioned in this article

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