3 FTSE 100 stocks I’m watching out for in November

These three FTSE 100 (INDEXFTSE: UKX) companies will report in November, and here’s what I’m looking for.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

The FTSE 100 financial calendar will be providing us with a few gems in November, and here are three I’m keenly anticipating for different, but specific, reasons.

Defensive

First up is Associated British Foods (LSE: ABF), whose full-year results should be with us on 5 November, and the City is expecting something largely unchanged from last year.

The company runs two distinct divisions, its foods business and the unrelated Primark low-cost clothing chain. While the latter is usually the star, I do like the defensive nature of the food business too, and it’s a rare example of a business split of which I actually approve.

I particularly want to see how Primark is doing, as it’s some way from the discretionary fashion end of the spectrum and covers the must-wear basics. I expect it to be significantly less affected by the high street downturn than more upmarket and higher-margin brands, and a pre-close update in September indicated an expected 4% rise in Primark sales.

Associated’s safety aspect is, I think, reflected in the stock’s forward P/E of 16, even with dividend yields unexciting at around 2%, and I’m hoping for ‘business as usual’.

Speculative

Next up is Aveva Group (LSE: AVV), a software company I recently cast my eye over. My interest here is based on the rarity of seeing a technology-based growth stock on the FTSE 100 soaring the way Aveva’s shares have — and I’m looking for evidence to decide whether it’s a genuine growth opportunity or an overpriced bubble.

A trading update on 24 September showed no indication that the wheels are set to come off this year, but we really need to see the full first-half figures due on 12 November.

What I fear about Aveva is that investors seem particularly sensitive to any hint of weakness, and we’ve seen some cliff falls in the share price over the past couple of years. With the share price having accelerated in 2019, gaining 70% since the start of the year, the current forward P/E valuation of a shade under 40 suggests any future imperfections could lead to a big crash.

I’m still staying away, but I’m watching closely.

Electrifying

I’m a fan of utilities companies and we have a few reporting in November, including United Utilities , Severn Trent and National Grid. But electricity and gas supplier SSE (LSE: SSE) is the one I’m most keen on, as it should provide the best indicator of how the sector is handling competition from smaller companies and their often more agile marketing. And that really does seem to be the biggest threat (other than perhaps that of nationalisation should Jeremy Corbyn’s Labour party win December’s election).

First-half results are due from SSE on 13 November, with the City expecting a 30% rebound in earnings per share after two years of slump. The share price has been picking up in the past few months, but dividend yields are still very high at more than 6% — and with the shares still down compared to five years ago, I think we’re still in a bargain buying period.

The dividend isn’t well covered by earnings, and though that’s usual for utilities, it is a risk. But that kind of pressure should lighten if forecasts prove accurate and cover rises to 1.2 times by March 2021.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK has recommended Associated British Foods. 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.

More on Investing Articles

Investing Articles

After it crashed 25%, should I buy this former stock market darling in my Stocks and Shares ISA?

Harvey Jones has a big hole in his Stocks and Shares ISA that he is keen to fill. Should he…

Read more »

happy senior couple using a laptop in their living room to look at their financial budgets
Investing Articles

How’s the dividend forecast looking for Legal & General shares in 2025 and beyond?

As a shareholder, I like to keep track of the potential dividend returns I could make from my Legal &…

Read more »

artificial intelligence investing algorithms
Investing Articles

Could buying this stock with a $7bn market cap be like investing in Nvidia in 2010?

Where might the next Nvidia-type stock be lurking in today's market? Our writer takes a look at one candidate with…

Read more »

Investing Articles

Is GSK a bargain now the share price is near 1,333p?

Biopharma company GSK looks like a decent stock to consider for the long term, so is today's lower share price…

Read more »

Snowing on Jubilee Gardens in London at dusk
Investing Articles

Could December be a great month to buy UK shares?

Christopher Ruane sees some possible reasons to look for shares to buy in December -- but he'll be using the…

Read more »

Young mixed-race couple sat on the beach looking out over the sea
Investing Articles

Sticking to FTSE shares, I’d still aim for a £1,000 monthly passive income like this!

By investing in blue-chip FTSE shares with proven business models, our writer hopes he can build sizeable passive income streams…

Read more »

Growth Shares

BT shares? I think there are much better UK stocks for the long term

Over the long term, many UK stocks have performed much better than BT. Here’s a look at two companies that…

Read more »

British Pennies on a Pound Note
Investing Articles

After a 540% rise, could this penny share keep going?

This penny share has seen mixed fortunes in recent years. Our writer looks ahead to some potentially exciting developments in…

Read more »