Mindful Money’s Monday share tips: Burberry, Sainsbury & Prudential

11th November 2013


Builder Barratt Developments, Sainsbury and Burberry are among those updating the market this week – we look at what brokers are recommending ahead of their reports writes Philip Scott.

One of the country’s best-recognised house-builders, the FTSE 250 listed Barratt Developments is scheduled to report its latest trading update on Wednesday. Underpinned by government initiatives, it is again expected to report strong trading. The past year has seen it enjoy a 68% share price rise and analysts are continuing to back the firm.

The group’s September full year results saw it reporting a “very strong start to the new financial year.”

Keith Bowman, equity analyst at Hargreaves Lansdown Stockbrokers says: “Average net private reservations per week per active site for the first 10 weeks had risen by 29.4% year over year. Further investments in new land are likely to be outlined, whilst management’s emphasis on low/sustainable group debt may be further underlined.

“In all, and with no clear catalyst in sight to impede existing housing market momentum, analyst opinion currently denotes a ‘buy’.”

On the same day, oil and gas explorer Tullow Oil delivers its own interim management statement,

Trading updates from the group have disappointed this year as the company reported several dry or economically unfeasible wells in East Africa and French Guiana from their exploration programme notes Sheridan Admans, investment research manager at The Share Centre. The share price has reflected this, given it is down by 36% over the past 12 months but the broker consensus on share data hub, Digital Look has the stock rated a ‘buy’, as does Admans. He says: “Investors will be hoping for better news from their drill tests in the last quarter and further progress on current development programmes in Kenya and Uganda.”

Sainsbury, 12% better over the past year, and 6% stronger over the past six months is due to report its half-year results on Wednesday. Having only recently reported its 35th consecutive quarter of underlying sales growth, pre-tax profit is expected to increase by just over 2% to £381.5m.

Bowman believes its management is likely to again underline its growing online and convenience store offering, factors increasing its appeal to consumers and driving its growing market share.

He says: “Growth in the group’s non-food offering, particularly clothing, may enjoy further comment, whilst an additional single digit increase in the dividend payment could again be declared.”

On balance, and with success to date already evident in a premium valuation, analyst opinion currently points towards a ‘hold’, adds Bowman, a sentiment Admans concurs with.

Insurer Prudential, up 48% in the past year, and by 6% over six months unveils its third quarter results on Thursday. Investors will be keen to see if the group can keep up the positive momentum in its operating profits, which has been led in recent times by growth in its US and Asian operations.

The consensus on Digital Look is calling the stock a ‘buy’, as is Admans. He says: “Given the improvement in markets and investor sentiment, shareholders will be looking to see if M&G, Prudential’s wealth management operation, can deliver another quarter of successive inflow taking it to 18, as it continues to expand its operation across Europe.”

Burberry, the luxury international brand, known for its distinctive check design, brings its second quarter results to the market on Thursday. The announcement of its boss Angela Ahrendts leaving was a shock to investors however brokers are still favourable towards the stock. Admans says: “Investors should be reassured that she leaves the company in a great position with strong brand recognition, excellent online offering and increased penetration in emerging markets. We currently list Burberry as a ‘buy’.”

1 thought on “Mindful Money’s Monday share tips: Burberry, Sainsbury & Prudential”

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