Date: Sunday 01 Jul 2012
Writing in today´s Sunday Times Tempus explains how Associated British Foods is one of his solid, defensive picks. Its food brands and its Primark clothing stores are at the cheap and cheerful end of the market, and he suspects the current bounce in the FTSE is not sustainable, and the market will fall again on further bad news from the Eurozone. If so, then he thinks defensive stocks such as ABF, Rolls-Royce and Vodafone should again outperform. Regarding the latter, he admits that Vodafone has trod water, despite the huge amount of cash the company shovels out in dividends. That, perhaps, as it has become embroiled in a dispute with the Indian authorities about tax. Still, you haven’t lost any money, and there are those dividends he comments.
Insurance giant Aviva has had a dire year - an embarrassing shareholder revolt over executive pay and performance in May saw chief executive Andrew Moss step down just a week after. Aviva's share price had declined around 60% since Mr. Moss took the helm in July 2007. The performance has most recently been hit by the company's exposure to troubled Eurozone economies such as Italy and Spain. Mr. Moss was set to unveil his new strategy at an investor day on May 24 but this has been postponed. But the fundamentals still look solid for Aviva, with group operating profits increasing by 6% to Ł2.5bn in 2011. And there is hope that a new boss will bring a new dawn for the company and hopefully some much needed stability after years of restructuring under Mr. Moss. With shares around 36% lower than they were a year ago, they look undervalued and Aviva is a good recovery bet for investors, says The Sunday Telegraph´s Questor team.
Software firm Idox has been offering hefty rewards against a backdrop of stock market gloom, having seen its share price nearly quadruple since April 2008. The group provides software that helps clients - such as local councils, private companies and charities - save money by offering more services online. The group reported a 54% surge in half-year profits to Ł7.3m last week. Investors who got on the bandwagon early might be wise to take some profit now, writes The Financial Mail on Sunday´s Midas column.
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