Mindful Money’s weekly share watch: ASOS, Smiths Group & Investec

15th September 2014

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After suffering a severe fall in the value of their shares ASOS investors will be looking for some light at the end of the tunnel when the online retailer delivers its fourth quarter trading update on Tuesday.

The FTSE AIM 50 listed firm, originally dubbed As Seen On Screen, has witnessed its stock plunge by 55% over the past 12 months, as investors lost confidence and sold out following a number of profit warnings.

However despite the volatility, the broker consensus has the shares in ‘buy’ territory according to Digital Look but the market will be on the look-out for some solid reassurance, not to mention more details on why earnings missed guidance by such a wide margin

Sheridan Admans, investment research manager at The Share Centre, who has the firm on his ‘hold’ list says: “The current impact of the strong pound on trading figures will be of interest for investors, as will the level of revenue growth. Any information about the performance of the Russian website and the soon-to-be-launched Chinese site will be sought after.”

Wednesday sees FTSE 100 engineer Smiths Group, which deals in aerospace instruments, medical equipment and heavy industrial seal post its full-year results. With its stock flat over the past 12 and six months, any news in regards to previously noted weakness at its Detection, Medical and Interconnect businesses, will be high on the agenda for shareholders, while the negative impact of sterling’s strength may also feature.

Keith Bowman, equity analyst at Hargreaves Lansdown Stockbrokers highlights that ahead of the results and with a turnaround at its troubled Detection business yet to be established, analyst consensus opinion currently points to a ‘sell’.

He adds: “More positively, likely ongoing strength for both its John Crane and Flex-Tek businesses may be underlined. Group revenue is forecast to materialise at around £3bn, down 3% year-over-year, whilst pre-tax profit is expected to have declined by just over 11% to £441m.”

South African fund management house Investec, up a strong 26% over 12 months, follows with its own update on Thursday.

The FTSE 250 constituent has seen its assets under management hit by the volatility in the Rand and looking to this week’s pre-closing trading update, Admans, says: “Followers of the company will be looking for an update on the Australian business, and overall  activity levels, which may have suffered over the  quieter period for the larger financial markets in the northern hemisphere. We currently list Investec as a ‘hold’.

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