Stock market

Britain’s stock markets boom! The FTSE 100 is beating the major global indexes, but who is leading the pack?

Image source: Getty Images

The UK stock market is having one of its best years to date as leading British companies continue to thrive. Famous mining firm Anglo American (LSE:AAL) has surged 21% this past week, following a major bid rejection and news of other potential offers. Rio Tinto or Glencore.

Natwest Group An 11% climb in seven days and near a fresh five-year high, was second to help drive the gains. The high street bank has now recovered almost all of its losses over the past year – and in half the time.

Barclays, The Ashted Group And Astra Zeneca The rest made up the top five weekly performers, each adding about 9.5%.

The FTSE 100 is taking the lead.

The FTSE 100 has been making global headlines, reaching 8,189 points in late trading on Monday. The sudden growth means the UK’s core index has outperformed many global indices year-on-year.

UK stock market vs global indices
Created on TradingView.com.

This move did not go unnoticed by the asset manager. AJ Bellstating: “Moving 0.4% higher to 8,175 means the FTSE 100’s year-to-date performance (+5.7%) is now better than it is now. Nasdaq 100 In the US (+5.3%), S&PBSE 100 in India (+5.2%) and CSI 300 in China (+4.5%).

With Anglo American leading the charge, let’s see where the company’s fortunes are headed.

Another day, another deal

Anglo appears to be in the crosshairs of several suitors recently, with news of a potential buyout coming fast and furious. The latest bid was for the Melbourne-based £31bn. BHP GroupWhich he rejected and claimedReduces the company significantly.“The Australian mining giant is now considering competing with a better bid.

Anglo is also considering selling its Diamond unit to De Beers. However, with the drop in diamond prices following the rise of lab-made imitations, it may be difficult to offload. The cost of these gems is about one-fifth of natural stones.

What do the numbers mean?

With Anglo’s share price now so high, its price-to-earnings (P/E) ratio has reached 140. Over the same period, revenues have declined, leaving the company with limited cash flow. That makes its dividend payouts look a little rocky. With earnings per share (EPS) at 23p, it calls into question how long the company can continue to pay an annual dividend of 64p per share.

Created on TradingView.com.

The bottom line

Earnings woes aside, Anglo still boasts a solid balance sheet. At £53bn, the value of its total assets almost doubles its liabilities. And with around £13.5bn in debt and over £25bn in equity, it has 12 times interest coverage and no immediate debt concerns.

However, while Anglo’s share price is currently riding on lucrative buyout offers, it could soon correct. With earnings and earnings down, the consensus among analysts is an average 12-month price target of £23.40 – a decline of 11% from current levels.

Of course, some short-term growth would be expected if it accepts the bid. But losing Anglo American to a foreign rival would be a major blow to the UK stock market, especially Shell in advance Staring NYSE.

Fortunately, the FTSE 100 still enjoys strong support from homegrown heroes. Rolls RoyceBarclays and NatWest.


Source link

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button