3 Shares The FTSE Should Beat Today

Published in Investing on 25 October 2012

WPP (LSE: WPP) and ASOS (LSE: ASC) both disappoint.

The FTSE 100 (UKX) is perking back up a bit today, gaining 15 points to 5,819 points after it was revealed that the UK economy is officially out of recession. Apparently, we enjoyed a 1% growth in the three months to September, buoyed by the Olympics.

But it's not all roses for some constituents of the FTSE indices. We take a quick look at three shares that are falling today...

WPP

Footsie advertising giant WPP Group (LSE: WPP) fell 23p (3.8%) to 785p after cutting this year's revenue growth outlook. The lowering of expectations from 3% growth to 2.5% growth follows a previous reduction from 3.5% in August.

Since then the shares, which had peaked at 884p, have slipped back. Forecasts prior to today put them on a forward price-to-earnings (P/E) ratio of 11 with a 3.3% dividend expected, so they don't look obviously overvalued.

ASOS

Online fashion retailer ASOS (LSE: ASC) fell 183p (7.3%) today after releasing results for the five months to 31 August, reversing a pre-announcement mini-surge. Although group revenues are up 32% to £238m and international sales rose by 46%, the City was clearly disappointed by the news that buying director Caren Downie is to leave the company.

Forecasts for next year suggest a trebling of earnings per share, but put those shares on a P/E of 48. Is there enough future growth through international expansion to justify such a high rating?

It's a shock when company shares fall like these two have, and one of the best long-term strategies for minimising the pain is to invest in solid dividend-paying shares. That's what Neil Woodford, does, and the free Motley Fool report 8 Shares Held By Britain's Super Investor” takes a look at his strategy. Click here for your copy.

Victoria

AIM-listed Victoria Oil & Gas (LSE: VOG) fell on full-year results, dropping 2.8% to 2.4p. Although estimates of reserves at Victoria's Logbaba operation in Cameroon upped by 50% and production there commenced in July, the firm's losses for the year widened from $4.7m to $7.7m.

If you want to find the best in the oil and gas business, the Motley Fool reportHow To Unearth Great Oil & Gas Shares” should be just what you want. It's free for a limited time, so click hereto get your personal copy.

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

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Comments

The opinions expressed here are those of the individual writers and are not representative of The Motley Fool. If you spot any comments that are unsuitable hit the flag to alert our moderators.

Vailima 25 Oct 2012 , 11:06pm

"Choppy markets, eurozone debts and market noise don’t phase Britain’s ‘super-investor’."
I know this is not Pedants Corner but TMF is here to educate so please can you change that to "faze".
I hope that comment was polite enough and on topic.
Regards
V

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