Our 2018 Dogs of the Footsie are proving their pedigree once again. As at 1 May, the portfolio of unloved companies that we lined up in February was ahead of the index in a quite volatile quarter, even though some of the Dogs have failed to keep up with the pack.
The Dogs strategy involves investing equal sums in the 10 FTSE 100 (UKX) shares with the highest historic dividend yields, based on past dividend payments; these can obtained using a screening tool such as our website.
Over the 17 years we have been running the portfolio, the strategy has consistently proved its worth.
Last year the collapse of Carillion meant it didn't come up trumps, but the Dogs have beaten the FTSE 100 over three, five and 10 years, as well as the full 17-year life of the portfolio.
The first... more
Have the mid-cap shares in Card Factory (CARD), the retailer of greeting cards and gifts, fallen too far given the board's guidance for an implied 8.5% yield at the current buy-price of 199p?
The stock initially fell in response to a Q1 update at Card Factory's AGM, but 194p triggered an intra-day rally to 206p, settling back under 200p as traders ponder how durable is Card's payout policy.
Operational cash flow eased 11.1% to £72.7 million in the last financial year to end-January 2018, and management continues to progress store openings. Thus, with modest cash reserves of around £3 million, it conveys "peak dividends", also because the board has indicated it will roughly halve the element of special payout this year, from 15p to 5-10p (my... more
Over the last months, the oil price has been volatile, trade war rhetoric has been running high, Brexit continues to weigh on the UK economy, and the global bull market could come to an end at any point. So now is a good time to consider switching to investment funds well-suited to a more volatile and riskier environment.
Often the best way to cope as the economic cycle matures is by diversifying your portfolio and adding some defensive positions. We have rounded up ten investment funds and trusts that might fit the bill.Rathbone Global Opportunities Fund
Tom Stevenson, investment director for Personal Investing at Fidelity Personal Investing, argues that "a good starting point for someone looking to add some diversification is an active global equity fund, which is able to... more
Is New Year optimism for the global economy and equities, now undermined by reality? What profit plunges materialise, still tend to be company specific, like Dixons Carphone (DC.)and Johnson Matthey (JMAT) - than imply a macro downturn.
Shares in Deutsche Bank AG (DBK) are also down after the Federal Reserve deemed its US business in "troubled condition", but this is a chronic restructuring/turnaround situation not an economic litmus test like banks can be.
As yet, the UK economy bumps along despite worries over Brexit. It will take more time for companies to reflect any shift in global prospects, although there are definite signs that things are not turning out as well as expected.Mixed US situation, and a question over China
US momentum remains a pillar for the global... more
The momentum behind Tesco (TSCO) and its improving share price continued today as another broker seized the opportunity to upgrade forecasts.
Barclays lifted its price target by 6% to 280p and said the supermarket giant remained its top pick in the European food retail sector.
Today's note adds to the flow of positive news in support of a resurgent Tesco led by chief executive Dave Lewis. In recent days, Bernstein and Citigroup have upgraded their price targets to 290p, while respected retail analyst Clive Black at Shore Capital has reiterated his 'buy' recommendation.
• Why Tesco has a fantastic few years ahead of it
Their confidence is echoed by this week's Kantar Worldpanel figures showing a sales increase for Tesco of 2.2% in the past 12 weeks, having... more
Despite reassuring investors that a special dividend will be in the post, Card Factory (CARD) shares fell victim to the brutal climate for retail stocks today.
A first quarter update showing a 0.4% drop in like-for-like sales contained few surprises given that Card Factory is up against tough comparatives and there's the impact of the Beast from the East on trading.
The company called it a robust performance that kept it on course to meet full-year expectations. Crucially for income investors, including fund manager Neil Woodford, the business is still on track to make a further return of surplus cash to shareholders.
It paid a special dividend of 15p a share worth £51.2 million at the end of last year and has promised another award this year.
But having previously... more
Richard Hunter, Head of Markets at interactive investor, commented "There is a great deal going on under the bonnet at Johnson Matthey (JMAT), with its cash generative ability allowing further reinvestment into new technologies.
The company is well positioned at the moment. The Clean Air division, which accounts for 64% of sales, continues to benefit via its catalytic converter expertise as emissions become even more of a focus for governments worldwide.
Meanwhile, the New Markets arm, whilst only currently contributing to 8% of sales, is home to its electric car battery development. Here, a significant shift towards electric cars could well benefit the company, let alone the exponential growth it may enjoy should hybrid vehicles fall fully into fashion, with both Clean Air and... more
Until recently, Italian politics barely got a mention outside of small circles in the City, now it could spell the end of the euro experiment. To look at the markets, you'd think the problem had been resolved, and this could indeed be something about nothing if the two anti-establishment parties play ball and avoid another divisive election. However, as with all political crises, and especially in a politically volatile debt-ridden state like Italy, they can rumble on, and this is one to add to the list of banana skins for this bull market. Focus will switch briefly back to tomorrow's US nonfarm payrolls, but few expect any major surprises, and certainly none capable of upsetting current interest rate expectations.FirstGroup
Just weeks after rejecting two bids from Apollo... more
Investors in Photo-Me International (PHTM) and Pressure Technologies (PRES) found out to their cost today about how faraway trends and developments can bear down on share prices.
In the case of Photo-Me, the photo booth and laundry company has been hit by the slower-than-expected take up of the Japanese government's My Number ID card programme. The scheme is not compulsory and demand has not met the recent significant growth in the country's number of photobooths.
This has led to the need for a restructuring of its Japanese subsidiary, which Photo-Me said will mean profits for the year to April 2019 are likely to be similar to this year's performance.
Shares in the company, which joined the London stock exchange in 1962, lost a fifth of their value. However, Photo-Me... more
The small-cap success story Kainos (KNOS) has continued to impress after shares in the Belfast-based IT company climbed to a record high today on the back of an eighth consecutive year of revenues and profits growth.
Kainos, which was set up in 1986 as a joint venture between ICL (now Fujitsu) and Queen's University of Belfast, provides digital services to Whitehall departments as well as to a range of commercial customers.
It joined the stockmarket in July 2015 when its shares were priced at 139p. Apart from a blip the following summer, they've been on an upward path ever since as Kainos continues to win projects with new and existing customers.Kainos IPO makes staff millionairesKainos pauses after stunning run
In today's results for the year to March 31, revenues... more