3 Shares The FTSE Should Beat Today

Published in Investing on 17 December 2012

Aggreko (LSE: AGK) outlook disappoints, and Vodafone (LSE: VOD) slides further.

The FTSE 100 (UKX) is continuing the down day it has last Friday, dropping 29 points to 5,893 by mid-afternoon. Still, it's only a small fall, and the index of top UK stocks did reach new nine-month highs several times last week.

Some individual constituents of the various FTSE indices have experienced somewhat bigger falls today. Here are three on the way down:

Aggreko

The Aggreko (LSE: AGK) share slump continued today, as the price lost a further 372p (17.5%) on the release of a pre-close trading update. Expectations for 2012 actually sound pretty good, with full-year performance said to be in line with expectations, and earnings per share (EPS) rising by "at least 15%".

However, the firm that provides temporary power supply and temperature control equipment also warned that 2013's performance is likely to be below this year's, suggesting that turnover would be around £100m down, with EPS no better than flat -- previous forecasts has suggested a 10% EPS rise.

Hunting

Hunting (LSE: HTG), the oil and gas services group, saw its shares fall 42p (5.2%) on the release of its pre-close trading statement, despite things looking pretty reasonable. Trading is in line with expectations, net debt is modest at £205 million, and the firm has resolved a tax dispute in its favour.

But the usual bugbear is Hunting's outlook, as the firm said that "the short term outlook is increasingly cautious due to the economic climate seen in a number of our operating regions".

Vodafone

Shares in Vodafone (LSE: VOD) (NASDAQ: VOD.US) dipped by 3.7p (2.3%) to 157p after the telecoms operator announced the latest purchase in its share buyback programme. Six million shares have been purchased, at a price of 161.7p per share, taking the total purchased since 10 December to 33 million, for a total cost of £53 million.

Share buybacks are supposed to boost shareholder value, but it's a controversial subject. And Vodafone's recent share price slide has not been a testament to success this in this instance. But who can resist that 7% dividend yield forecast for the year to March 2013?

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 get your copy, click here while it’s still available.

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

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Comments

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ANuvver 17 Dec 2012 , 6:39pm

I thought the Vodafone drop was more to do with telecoms jitters after KPN suspended their dividend.

SimonTempler1 17 Dec 2012 , 10:16pm

....and the loss of 282,000 customers during October in Spain

ANuvver 18 Dec 2012 , 2:52am

Fair enough, but I'd say the market already had strong concerns about drastically declining sales in "Southern" Europe.

What I don't hold with is the author's implication that today's drop was caused by the announcement of another tranche of buybacks, which we were expecting anyway.

It seems to me that City assessment of the costs of 4G licensing and the Fitch downgrade of KPN had more to do with today's action than the confirmation of a preannounced buyback.

Beware the reporting trope of X happens "as"/"after" Y happens. This is something that has increasingly migrated, in all journalism, from headlines, where it's excusable, into copy, where ... not so much.

paullidd 18 Dec 2012 , 7:21am

£53 million for 33 million shares works out at about £1.61 a share. So vod have managed to buy back 33 million shares at a few pence above there 52 week low. Maybe i'm missing something here, but, to me that sounds like quite a successful share buyback program.

In fact I seem to recall some Fool articles on buybacks which also said that Vod had been quite good at buying shares back at low prices rather than over-inflated ones.

UncleEbenezer 18 Dec 2012 , 12:56pm

My concern over VOD right now would be how much it's going to have to pay for 4G spectrum.

Seems mobile telcos have a staggeringly high tax bill (under another name) once a decade or so, and have to spend the rest of the decade recovering to look good again.

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