Yahoo Finance GuruScreens - upgrades and downgrades - November 4th
Standard Chartered
Standard Chartered qualified for the Dividend Dogs Screen on 1 November. The dividend yield has amounted to 5.7% over the last 12 months, while the projected yield for 2015 is 5.9%. The company seems to be generating the cash to pay this dividend. Operating cash flows ($9.97 per share) exceeded the expected dividends per share for 2014 ($0.85) and 2015 ($0.89) respectively.
However, the share price has come down heavily over the last year, having underperformed the market by 36% over the last year and 17% over the last month. Investors should be cautious when the apparently compelling yield is actually the result of a substantial freefall in the share price. Momentum has a tendency to persist in the stockmarket both on the upside and the downside. Standard Chartered's share price has fallen as EPS figures for H1 2014 were lower than EPS figures for H1 2013.
JD Wetherspoon
Gross Profit Margins at JD Wetherspoon dropped from 12.4% to 11.9% in the year ending July 2014. The management team have guided that margins may fall even further, between 7.7% and 8.1% next year. The drop in 2014 can partly be explained by the firm's decision to grow its headcount by 3,000, taking the total number of employees to over 34,000.
Although profit margins were squeezed, revenues increased from £1.2bn to £1.4bn. This was driven mainly by growth in 'food sales' (12%). 'Bar sales' also increased by 3% as the company opened 46 pubs during the year. The company expects to open another 40 pubs in 2015, and brokers expect the company to grow earnings by around 12% during this period.
JD Wetherspoon recently qualified for the Charles Kirkpatrick Bargain Screen, which filters for companies that are cheap in terms of their Price to Sales ratio, and also have good share price momentum.
MoneySupertmarket
MoneySupertmarket has managed to grow earnings through the recession, each year since 2009. Brokers also expect earnings to grow by another 13% over the next 12 months. A key factor here may be the firm's investment in its aggregation engine, which gathers and displays prices from the banks, insurers and energy suppliers. Furthermore, demand for the company's 'home services' division (which helps users compare prices for services like utilities) has been supported by price hikes amongst energy provides.
The market has responded well to the firm's earnings growth. MoneySupertmarket has beaten the market by 33% over the last twelve months and 12% over the last three months. The company now trades above its 52w High and on 1 November qualified for the 52 Week High Momentum Screen.
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