Nick Raynor, investment adviser at The Share Centre, gives his thoughts on  companies announcing results this week (w/c 3 May 2011).

Wednesday 4 May 2011

Next (NXT.L) - Interim management statement

Although we expected margins to be squeezed in the retail sector, Next's competitors have raised concerns that the situation is worse than previously thought. The increase in the price of cotton and tighter consumer budgets have both taken their toll. Investors should also note that interest rates are almost guaranteed to increase at some point this year. The share price is getting close to all-time highs and something will have to give soon. This is still a ‘hold' for us but a very cautious one.
HOLD.

Standard Chartered (STAN.L) - Interim management statement

Standard Chartered's previous update came just before the tragic events in Japan and despite positive results, the share price fell due to worries over the company's future figures. This will be the first update since the events and the share price is getting close to its previous levels. We feel any weakness experienced was a buying opportunity due to its potential in the Far East and hope these figures will justify our conviction.
BUY.

Also reporting:

Legal & General (LGEN.L) - Interim management statement. HOLD.
Xstrata (XTA.L), Antofagasta (ANTO.L) and Kazakhyms (KAZ.L) are releasing Q1 production reports.

Thursday 5 May 2011

Diageo (DGE.L) - Interim management statement

Investors will be interested in the company's next steps after they pulled out of the purchase of US company, Stock Spirits. The price tag was in the region of $1 billion but the two companies could not agree a price. Investors will want to see the cash returned to them through share buy backs, increased dividends or further merger and acquisition activity.
BUY.

Smith & Nephew (SN.L) - First quarter results

Smith & Nephew's share price suffered a setback prior to these results. It was widely rumoured that US giant Johnson & Johnson would be bidding for the company, however, it has just paid nearly $20 billion to Swiss firm Synthes and therefore it is very unlikely that any deal for Smith & Nephew will go ahead. The weakness in share price could be seen as an opportunity for investors especially if the first quarter figures are good, so we could see an upgrade coming.
HOLD.

Lloyds Banking Group (LLOY.L) - Interim management statement

Why anyone would want to buy shares in Lloyds Banking Group is still quite surprising to us. The Government continues to have a majority holding, we are experiencing very little change in the share price and very few dividends, if any at all, are being paid. Few investors will want to sell and take significant losses so we still recommend the shares as a ‘hold'. These results may prove us wrong but the continued direction of the share price indicates that this is unlikely.
HOLD.

Also reporting:

Rexam (REX.L) - Interim statement. HOLD.
Randgold Resources (RRS.L) - First quarter results. HOLD.
Schroders (SDR.L) - Interim management. SELL.
Amec (AMEC.L) - Interim management statement. HOLD.
Vedanta Resources (VED.L) - Full-year results. HOLD.

Friday 6 May 2011

Royal Bank of Scotland Group (RBS.L) - Interim management statement

This is another bank suffering from Government control and unlikely to offer any comfort to shareholders in the short term, unless you are prepared to trade on small margins. However, we hope to be proved wrong and these results can offer a glimmer of hope.
SELL.

Rolls-Royce (RR.L) - Interim management statement

Rolls Royce has recently won small but meaningful contracts in China. The recent problems with new engines seems distant now and as confidence starts to return to the travel sector more new engine orders could be seen very soon. We expect some contract wins to be announced in this update and would be slightly disappointed if there isn't. This is still a ‘buy' for us for the foreseeable future.
BUY.

Also reporting:

Admiral Group (ADM.L) - Interim management statement. HOLD.

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