29th November 2013
Brokers are tipping FTSE 100 listed Wolseley and Compass as stocks to ‘hold’ following decent market updates from both firms this week writes Philip Scott.
Wolseley, the world’s largest trade distributor of plumbing and heating products, in its first quarter results showed its US and UK operations were continuing to improve as revenue continue to rise in the regions however there has been no signs of any improvement in Europe.
Over the past year its shares are up by 18% and by 4% in the past three months.
Graham Spooner, investment adviser at The Share Centre says: “The US business is a highly important part of the company so improvements in the region are encouraging. Wolseley reported that overall margins continue to creep higher, up 0.2%.
“We continue to recommend Wolseley as a ‘hold’ for investors. The share price has had a good run over the last two years and any potential upside could be limited.”
In addition, broker Panmure Gordon has reiterated its ‘hold’ position on the shares.
Contract catering giant Compass unveiled its fourth quarter results this week. The past year has seen its shares jump by 27%, and edge 7% higher in the last three months.
Investors will be cheered by news that the firm’s year-on-year revenue rose 4.3%, earnings per share were up 12.5% and the dividend was increased by 12.7%. Compass also announced a new £500m share buyback programme for 2014.
The Share Centre continue to have a strong ‘hold’ recommendation on Compass as the management targets new business in faster growing emerging markets. Panmure Gordon is also recommending investors sit tight while for its part Deutsche is tipping the stock as a ‘buy’.