Week Ahead: FTSE Giants | UK Housebuilders | US Laggards

5th Feb by Megan Boxall

35 comments 3148 reads

Good morning and welcome to the Week Ahead, a new content feature from the team at Stockopedia, which we’re going to be testing in the coming weeks.

We’ve heard your feedback requesting more analysis and coverage of larger companies in both the UK and overseas and we hope that this blog will help satisfy those requests as well as providing a weekly destination for your discussion of the biggest stocks on the biggest global markets.

As the title suggests, we’ll be using this blog to highlight announcements due in the coming week (including company financial results, trading statements and relevant economic events) and offering our opinion and analysis to help you make the most informed decisions.

And we’ve got a big week to kick off with, as the FTSE reporting season begins in earnest. BP gets things going on Tuesday with its annual results statement and on Thursday we’ll have numbers from AstraZeneca, Unilever, Compass and British American Tobacco.

It’s also still hectic across the pond (although the tech giants, which tend to capture the most interest from UK investors, have already announced their numbers). Big Pharma will be out in force on Tuesday, with three companies set to announce their annual numbers - it’s always an interesting sector to look at in an election year. And on Wednesday, PayPal will provide its annual update covering what has been another rough year for the former high flyer.

Macro events are relatively scarce - no doubt a relief to any financial journalist attempting to cover the biggest investment news as it gets announced. But we’ll have mortgage data from Halifax on Wednesday and PMI data on Monday - which may provide more clarity on economic health and help signal whether those pesky interest rates (which last week were held firm at 5.25%) might finally come down.

Coming up this week…

Do get in touch in the comments section with your thoughts and recommendations for this blog.

…

Day	Big UK earnings	US company reporting	Economic announcements
Monday - 5 Feb	Vodafone Q3 trading update	McDonald’s
Tuesday - 6 Feb	BP final results Virgin Money trading statement	Big US pharma final results: Amgen, Gilead, Eli Lilly Spotify financial results
Wednesday - 7 Feb	Barratt Developments final results	ARM Holdings PayPal Walt Disney Uber	Halifax house price index

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mabie41

5th Feb

Thanks lots of good information in one post

TB_Investor

This could be the start of a new thread altogether if we start sharing what we are watching :D

Part of the reason I bought Card Factory was because I liked the financials and its recovery post-COVID, but then also found myself always going whenever we had a party to attend, a card needing to be sent, a kids party were we throwing etc. Its incredible value (as is the share price tbf...)

In my household we will be a buyer of Disney's full suite of products for many years to come!

John O' Gaunt

Thanks very much. Just what we need!

abtan

Spotify Technology SA (NYQ:SPOT)

Hi Megan

Thanks for kicking off this new content piece. What a great way to introduce the week.

---

Interesting comments on Spotify Technology SA (NYQ:SPOT). I agree with you, it's very expensive right now and I recently trimmed my position after a nice run over the last 2 years.
However, I kept a sizeable chunk of my holding as the underlying growth continues to be excellent.
Check out the increase in Monthly Active Users (MAUs) for both Ad-Supported and Premium customers as of the last update (sorry, it's not highlighted in my tables below, but MAU is in millions.)

AD-SUPPORTED

PREMIUM

Competition in music streaming can be very region-specific, so it's great to see the high growth outside of North America and Europe, especially with non-paying users, which should provide a nice funnel for future paying users.
Operating Expenses are expected to come down, so hopefully there's some operating leverage waiting to surprise us holders in the next few years too.
The company has grand ambitions for the next decade, such as a x4 increase in ARPU (Average Revenue Per User) by 2031, many of which I think are unrealistic. However, even assuming less ambitious achievements I see plenty to like.
There continues to be a big push into other areas such as merchandising - indeed I bought pre-sale tickets via Spotify to a concert by The National last year as I was identified as a regular listener of the band.
I would never have seen these tickets for sale without the Spotify email prompt.
I think it's worth adding that out of all the subscriptions I have Spotify Technology SA (NYQ:SPOT) would be the last one to go - I use it daily. Actually I'm using it now as I type this.

On the point about expensive stocks, I sold my holding in Microsoft (NSQ:MSFT) today.
It's been a nice hold for the last few years, but I'm not sure I understand the current $3t valuation. I have a feeling that I might come to regret that one - still trying to work out the whole when to sell thing.

Thanks again

Abs

martinck1

Excellent addition to the weekly reading, thanks Megan

BnB

On the point about expensive stocks, I sold my holding in Microsoft (NSQ:MSFT) today

Gosh. I consider MSFT to be the gold standard. Pretty much the last name I would sell. I do think it’s a bit stretched so I won’t question your logic. I just wouldn’t want to not own the very highest quality megacap.

Microsoft (NSQ:MSFT)

It was hard going against consensus on this one.

However I find it hard to believe that the share price will keep going up indefinitely, especially at the current valuation.

We don't need to look too far back to see that the share price didn't go up at all between between 1999 and 2015.

That must have been a long 16 years for holders, although I'm sure the dividend helped.

That's not to say that the share price won't go up in the next 15 years, however, it feels as though there can't be much further to go on valuation grounds ($3t market cap vs $20b FCF in H1).

With limited funds I would rather pivot into something where I see more short/medium term upside.

I imagine that the above logic is something that I will inevitably regret.

Paul2148

6th Feb

Regrading your comment on Card Factory,

”then also found myself always going whenever we had a party to attend…”,

could this not be a form of confirmation bias?
I also hold CARD, along with DNLM, and find myself visiting these more than I may have in the past.

Glass half full

Really useful addition, enjoyed the content Megan.

Mark Carter

Fun fact for the day ... Over the last 20 years ULVR shares have risen at about 6.2%pa. The ASX by 3.2%. That's a 3% outperformance pa, which OK, although I doubt many will get over-excited. In absolute terms, ULVR is 3.3X the price, and ASX is 1.9X the price over that period.

If we assume that ULVR shares are capable of returning 6% pa over the next few years, together with a dividend of 4% pa, then that's a total return of 10%pa. Not a bad return.

From 2012-17 net profits have risen at about 6.7% pa. From 2017-22 it has slowed down to 4.8%. However, revenue growth has been higher in the latter period than in the former.

Valuation is a lot cheaper now, mind. The fwd PE is 16.7. In Sep 2018 it was 20.1.

Maybe the new boy can light a rocket under this thing.

I hold ULVR, but I'm hardly excited.

PYPL I seem to recall that I bought PayPal during its spinoff. That would have been around $38 I guess. I got bored with it and sold. In retrospect I figured that it was a bad idea to have sold because I used it a lot. Not to mention the fact that it went to $300.

I don't know what to make of it all now. I don't have Apple or Google Pay and find PayPal "works for me".

Ian113

very useful for the coming week thank you.

Silverback01

7th Feb

This "Week Ahead" feature is a valuable addition I feel, that aligns with my desire for deeper analysis on key market players and events. I especially appreciate the blend of company-specific analysis with broader economic indicators, providing a more holistic view of potential market movements. I'm looking forward to future editions and the discussions they will inspire within the Stockopedia community.

tic_tac_toe

Today we get Barratt Developments (LON:BDEV) and Redrow (LON:RDW) coming together

The boards of Barratt and Redrow are pleased to announce that they have reached agreement on the terms of a recommended all-share offer for the combination of Barratt and Redrow, pursuant to which Barratt will acquire the entire issued and to be issued ordinary share capital of Redrow (the "Combination"). It is proposed that the Combination will be effected by means of a court-sanctioned scheme of arrangement” and “On the basis of the closing price per Barratt Share of 530 pence on 6 February 2024 (being the last Business Day prior to the publication of this announcement), the terms of the Combination imply a value for the entire issued and to be issued ordinary share capital of Redrow of approximately £2,524 million and represent a premium of approximately 27.2 per cent. to the closing price per Redrow Share of 600 pence on 6 February 2024”

doctor dave

PayPal Holdings (NSQ:PYPL) surely being gradually destroyed by Apple Pay on your phone for, er, everything.

Yes it definitely is, but combining that with the fundamentals of the business helped make my investment decision.

At one point people were saying Works co uk (LON:WRKS) was a recovery play, you only had to go in the stores or walk past them to see that they were empty 90% of the time. That kept me well away from the investment.

Its not the be all and end all, but using a product/service/store of potential investments and asking friends and family for their thoughts helps define your thoughts and decisions. Of course it needs to be coupled with financial analysis, micro trends, and wider macro picture, and shouldnt be blindly used for decision making, you need a green tick next to all in the main....

8th Feb

Encouraging outlook from Unilever (LON:ULVR) FY results (I hold). New management talking about the issues and metrics that matter to most investors. Hopefully Terry Smith has got through to them. The question now is can they deliver?

Helvellyn

9th Feb

Hopefully this will become a regular feature but not too much participation so far, perhaps it could do with a plug from Paul or Graham on the SCVR to make subscribers aware it exists.

Megan Boxall

Thanks for your comment. Good idea, we can provide a link from Monday's SCVR when we publish the next article.

The real Tim

13th Feb

This is very good content. A few thoughts. Having "week" as the overall organising idea, gives you the flexibility to write about anything, which is helpful, but maybe in the background you can have an editorial rotation where you cover some "usual suspects" and some interesting questions. For the usual suspects, it would be sector reviews (e.g. your housebuilder section and UK market in general. But also things like Europe, Asia and asset allocations e.g. the 60/40 stuff. For me, a novice, then there also seem to be big thematic questions like "Is 2024 a year of growth vs dividend shares" where I spent the last 2 years "hiding" in big yield shares but feel like this year growth might be a better idea (or not). I think many less expert investors follow these kind of general themes as well as the more micro individual company type deep dives which are tricky for you to cover with so many companies. Anyway, all good, thanks for writing this stuff!

Week Ahead: FTSE giants | UK housebuilders | US laggards

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Megan Boxall

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