3 Shares The FTSE Should Beat Today

Published in Investing on 8 November 2012

Balfour Beatty (LSE: BBY) hit by dire conditions in the construction business.

The FTSE 100 (UKX) is still depressed after yesterday's 100-point crash caused by reactions to US markets, and is just eight points up on the day to 5,799. Just when we were hoping it might head up further past the 5,900 level, it slumps below 5,800.

Some individual companies are having a bad day too. Here are three that are falling...

Balfour Beatty

Shares in Balfour Beatty (LSE: BBY) plunged 47p (15.5%) today to 259p after a profit warning. In a third-quarter update, the construction engineer told us of very poor trading conditions in the construction business, with US markets still depressed and performance in the UK lower than expected.

Full-year profit is going to be less than previously expected, though some of Balfour Beatty's divisions are having a better time of things, and the firm believes it is in a good position for the medium to long term. But the short-term outlook appears tough.


Dialight (LSE: DIA) dropped 71p (6%) to 1,111p today, reversing a strong trend that had taken the shares up 60% in the past 12 months. The fall was caused by news of a contract delay for the LED lighting specialist, meaning that the firm's Signal Lighting division is performing below expectations, though growth is expected to return to normal in 2013.

With a high-flying growth company like this, the slightest disappointment can cause a big drop, especially when the shares are so highly rated -- current forecasts put them on a forward price-to-earnings (P/E) ratio of around 30 for the year to December.

Britain's ace investor Neil Woodford avoids the risks of growth shares by, well, not buying them. Instead, he goes for top-quality companies with dependable long-term dividend records. And he's beating the FTSE in the process.

We look at some of his investments in our free report 8 Shares Held By Britain's Super Investor. To get your copy, click here while it's still available.

Howden Joinery

Howden Joinery (LSE: HWDN), which had seen its shares soar by 60% since the start of the year, faltered today, losing 5.8p (3.5%) to 160p. In its interim management statement, the firm told us that things are generally going as expected, and it is coping with demanding market conditions successfully.

The fall is presumably down to general market sentiment, perhaps with a bit of profit-taking thrown in.

Which are the best sectors to invest in if you want to avoid falling shares? That's what we asked the Motley Fool's top analysts, and you can see how their picks have fared so far this year by reading their report. It's free, so click here to have a copy sent direct to your inbox while it's still available.

Further Motley Fool investment opportunities:

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

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