Broadcasting colossus ITV (LSE: ITV) is a FTSE 100 share I’d happily buy before third-quarter financials are released tomorrow (Tuesday, 12th November).
Brexit uncertainty might be persisting but the advertising market on these shores is gradually improving, as a slew of datasets have shown. The latest AdSpend report from the Internet Advertising Bureau, for example, has shown that UK digital ad spending jumped 13% in the first half of 2019 to £7.3bn, and happily for ITV this freshest release showed spending on video formats rise the sharpest (up 27% year on year).
ITV’s share price has picked up traction since mid-August but a forward price-to-earnings (P/E) ratio of 10.5 times and a whopping 5.8% dividend yield suggest that it remains undervalued. The blue chip has previously advised that ad spend will range between a 1% fall and a 1% rise for the third quarter but it has a history beating forecasts of late, and this bodes well for the coming days.
I certainly don’t believe that share pickers should countenance buying up Anglo American (LSE: AAL) shares over the next few sessions, however.
Latest industrial production data from China is slated for release on Thursday, 14th November, and while the most recent gauge showed a surprise 5.8% uptick for September, I fear that a bigger-than-expected fall could come in for October.
Factory data from the world’s commodities glutton continues to broadly deteriorate and imports into China slumped 6.9% in October, the sixth monthly fall on the bounce, illustrating the impact of cooling economic growth across the world and US-Chinese trade bickering.
And particularly worrying for iron ore giant Anglo American was news that imports of the steelmaking ingredient dropped 6.5% last month as demand from Chinese mills dived. I’m not tempted by the company’s forward P/E ratio of 8.8 times or its chunky 4.6% dividend yield, either. The prospect of sinking sales in 2020 makes the mining play too much of a gamble, in my book.
I’d be much happier to use any spare cash to improve my holdings in Taylor Wimpey (LSE: TW) instead. Fresh financials are slated for Wednesday, 13th November, and the continuance of strong trading updates from across the sector means that I expect another assured release from this particular Footsie operator.
Brexit uncertainty may have halted the electric profits growth of recent decades as broad homebuyer appetite has cooled and property values have cooled. But that house price crash that many had predicted continues to remain elusive – indeed, freshest data from the Halifax showed home values rise 0.9% year on year in October.
Hardly cause for mad celebration, sure, though solid enough for City analysts to expect the likes of Taylor Wimpey to keep shelling out big dividends. For 2019 the homebuilder boasts a whopping 10.6% dividend yield but this is not the only reason to buy today as, for long-term investors I believe a forward P/E ratio of 8.4 times provides plenty of upside once the market improves in the years ahead.
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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended ITV. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
Motley Fool UK 2019