It’s been a positive news-packed session for this group of mid-cap shares which are screaming higher today. Our City writer explains why.
Fast-moving shares in Aston Martin Lagonda (LSE:AML) were today in the slipstream of Premier Foods (LSE:PFD), John Wood Group (LSE:WG.) and Just Group (LSE:JUST) during a bumper session for many FTSE 250 investors.
The luxury car maker continued to motor ahead today, trading above 300p for the first time since May as buyers returned in numbers after last week’s better-than-expected annual results and Sunday’s podium finish for the Formula One team of the same name.
The stock, which languished at 90p following November’s warning of delivery delays, is now up by over a third in the past week and by 95% so far this year after executive chair Lawrence Stroll said the fruits of a turnaround plan should start to be seen during 2023.
The Warwickshire-based company’s shares settled 77.5p higher at 300p, but faced plenty of competition in the race to lead the FTSE 250 index.
The best-performing stock was consulting and engineering firm Wood, whose shares jumped 28p to 222.1p after it disclosed a fourth takeover approach by US private equity giant Apollo.
- Stockwatch: should I buy Aston Martin shares, or sell up?
- Insider: bosses spend over £1m on FTSE 100, AIM and Aston Martin
- Daily Trading Flash: 10 most-traded shares 7 March 2023
Wood is minded to reject the proposal at 237p a share or £1.65 billion, which compared with 230p in a previous move in February. It said: “The board will continue to engage with its shareholders and intends to engage further, on a limited basis, with Apollo.”
Aberdeen-based Wood is now focused on the core markets of energy and materials after boosting its balance sheet with September’s disposal of its built environment division.
Alongside Wood, shares in Premier Foods jumped 15p to 130p as the Mr Kipling, Sharwood’s and Bisto firm forecast annual profits for the year to 1 April of about £135 million.
The upgraded guidance, which comes only seven weeks after the company’s strong Christmas trading update, reflects a continued improving trend in volumes as households increasingly look to save money by cooking at home rather than eating out.
Price increases have also helped, meaning fourth-quarter revenues growth will be at least 10% compared with City forecasts for around 7%.
The stronger-than-expected trading, which has been led by branded grocery, means full-year profits about 10% higher than last year and 11% ahead of City expectations.
Analysts at Peel Hunt also increased their profits forecast for next year by 6%, adding that the update increased confidence in Premier’s long-term performance.
House broker Shore Capital believes the upgrades to earnings, a normalised balance sheet and the prospect of an update on the company’s pension position in May’s annual results underscored the potential for shares to structurally re-rate.
- The FTSE 100 companies paying dividends worth £8bn in March
- 10 UK shares Warren Buffett might put in his ISA in 2023
- Five ISA lessons that nobody taught you at school
Shares were 92p in mid-October but Shore sees a possible share price upside to 183-195p. The City firm added: “This is a high-quality business that is structurally undervalued.”
Just Group shares also posted double-digit growth today after the retirement income firm’s annual results benefited from strong new business growth in the UK pension transfer market.
Underlying operating profit of £249 million rose 19% and a healthy solvency position has given the company room to increase its dividend by 15% to a better-than-expected 1.73p a share.
Peel Hunt added: “The company is well capitalised to continue to fund new business growth in a higher interest rate environment and a period of accelerated demand for annuities.”
On the FTSE 250 fallers board, Spirent Communications (LSE:SPT) slid 27.9p to 183.1p as the 5G telecoms equipment testing firm offset a sixth consecutive year of profit growth by warning revenues are likely to decline in 2023.
It has seen delays to decision making by some customers, although chief executive Eric Updyke said business drivers remain intact as he hiked the final dividend by 13% to $4.94 a share.
Wincanton (LSE:WIN) also endured a difficult session in the FTSE All-Share, falling 79.5p to 226p after revealing that HMRC is switching to another supplier for the provision of logistics services to support UK customs arrangements at inland border facilities.
Alongside the loss of this contract, Wincanton said the accelerated reduction in consumer spending and customer volumes meant profits for the 2024 financial year will be materially lower than the current market consensus of £63 million.
The company said it continues to see significant growth opportunities, including in eFulfilment, as well as the resilience of core sectors in general merchandise and grocery. However, shares today fell to their lowest level since summer 2020.
These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.
Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.