3 Shares The FTSE Should Beat Today

Published in Investing on 15 November 2012

Valiant Petroleum (LSE: VPP) and Resolution (LSE: RSL) fall on news today.

The FTSE 100 (UKX) is falling further on the news that the eurozone is back in recession for the first time in three years, after shrinking for two quarters in a row. At the time of writing, the index of top UK shares is down a further 23 points to 5,698.

A number of oil and gas related shares, mainly small caps, fell today, even though shares in BP (LSE: BP) actually gained on reports that it is likely to face a criminal fine of between $3bn and $5bn over the Deepwater Horizon disaster. But uncertainty is what the market really hates, and at least BP is getting closer to a final figure now.

Valiant Petroleum

Valiant Petroleum (LSE: VPP) lost 8p (2%) today on the news that the firm has appointed Michael Bonte-Friedheim as acting chief executive. The move leaves the previous boss, Peter Buchanan, free to work on a planned buyout proposal for the company.

Valiant had previously announced it was looking at various ways to release shareholder value, with news of a possible takeover emerging in early October. But with a takeover attempt coming from Mr Buchanan himself, impartiality considerations may have led to this latest price fall.


The shares of Resolution (LSE: RSL) slipped 12p (5%) after an ironic update told us that the costs associated with the insurance firm's cost- reduction programme are going to be higher than expected. An additional £65m charge is now on the cards, largely due to the complexities of merging IT systems.

On the upside, we were told of "strong operational progress" in the UK, but international business "remains below par as a whole, with the continued uncertainty in Europe and other markets weighing on overall performance".

Man Group

Man Group (LSE: EMG) fell back today, dropping 4p (6%) to 74p, as the hedge-fund manager continues its struggles to get its automated 'black box' trading strategies back into profitable territory. The group needs to exceed its high-water-mark targets in order to collect premium charges from  clients.

There could still be one last mega-dividend from Man this year, forecast at 17% of the share price, but such a payment would exceed forecast earnings nearly three-fold. Reality has set in for next year, with 7% currently forecast, though even that expected payment is likely to be barely covered by earnings.

Finally, how does Britain's ace investor Neil Woodford avoid share price falls? He goes for a strategy of buying solid blue-chip shares paying dependable long term dividends. And in doing so, he's built a record of beating the FTSE for nine straight years.

If you want to see how Mr Woodford manages to beat the market, the free Motley Fool report “8 Shares Held By Britain's Super Investor” takes a look at some of his key holdings. To enjoy your copy, click here while it's still available.

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

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